Legislation to modernize the Medicare program is now a reality.  The Medicare Prescription Drug and Modernization Act of 2003 passed final approval in November.  Sponsors of the original bill believe it will positively impact the health and wealth of countless Americans. 

 

This new law will revamp Medicare and bring it in line with the types of commercial insurance coverage many people have today.  Beneficiaries will be able to choose whether to remain in traditional fee-for-service Medicare or participate in PPO or HMO arrangements through the Medicare Advantage Plan.  Medicare Advantage will also offer drug coverage.

 

There will be more responsibility to provide Medicare beneficiaries high quality health care.  The Act requires hospitals to furnish data to show they meet standards of quality for Medicare patients.  Medicare payments would be reduced for hospitals that fail to furnish sufficient evidence of quality care.  Plans may provide incentives to physicians who reduce medical errors or adverse drug interactions. 

 

The Act provides beneficiaries access to preventive care and disease management services for chronic conditions.  For example, plans must cover screening tests for early detection of cardiovascular disease and laboratory screening tests for people at risk for diabetes.  Pharmacy providers must have programs to provide medication therapy management for people who have multiple chronic conditions, use multiple prescriptions and are likely to incur high drug costs.  Sponsors will offer beneficiaries negotiated prices and discounts, and must also provide convenient access to pharmacies.

 

The new law will stabilize the cost of services and medications by stimulating competition between commercial insurance carriers.  The Act provides significant incentives for carrier participation.  As more carriers join the program, health care and prescription prices would stabilize or fall in some cases. 

 

Quick assistance may be the best thing about the Act.  Medicare-endorsed drug discount cards will be available no later than six months after enactment (sometime this spring) until drug benefits become available in 2006.  At that time all people with Medicare will have access to a voluntary prescription drug benefit.  The program is affordable: the average premium will cost $35 a month.  Seniors and people living with disabilities will see substantial savings.

 

Commercial health insurance plans may also benefit indirectly from the new Medicare law.  Competition for Medicare enrollees may stabilize the cost of medical care and health insurance rates.  Disease management programs developed for Medicare enrollees will be offered to commercial insurance participants to manage their chronic medical conditions such as diabetes, asthma and heart disease.  As a result, the increase in the overall cost of health care particularly for prescription drugs will begin to level off.

 

The Medicare Prescription Drug and Modernization Act of 2003 propels Medicare into the 21^st century.  Americans should see substantial gains in the quality of health care and considerable stability in the cost of services and prescription drugs.  Modernizing Medicare will improve the quality of health care and lower the cost of medical services for all of us.