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New Medicare Program May Impact Use of Medigap Drug Coverage

Mon, 01/26/2004 - 12:00am — Karen Stevenson
Description: 

From CareScout

Medicare beneficiaries will not be allowed to use insurance to cover the share of prescription drugs under the new Medicare bill. Millions of current Medicare beneficiaries have bought insurance to fill gaps in cost that Medicare does not cover. Yet under the new provision Medigap policies that help pay the cost of drugs these beneficiaries are prohibited use of this coverage after January 1, 2006.

Congress cited two reasons for prohibiting the sale of Medigap policies. The first reason was that the Congress wanted to ensure that beneficiaries covered some of the cost of their medication and did not overuse medical services. Secondly, the legislatures wanted to prevent the duplication of the new Medicare benefit.

The Medicare drug plan may further limit the use of medications by beneficiaries through the creation of a preferred drug list. In this case only the drugs listed would be covered under Medicare. Patients could not buy private insurance to cover the cost of medication that is excluded form the preferred list.

Furthermore, low-income elderly that qualify for both Medicare and Medicaid would receive their drugs through Medicare. Even though Medicaid covers more medication cost than Medicare, the bill generally prohibits Medicaid programs from supplementing the Medicare drug benefit.

From CareScout

Medicare beneficiaries will not be allowed to use insurance to cover the share of prescription drugs under the new Medicare bill. Millions of current Medicare beneficiaries have bought insurance to fill gaps in cost that Medicare does not cover. Yet under the new provision Medigap policies that help pay the cost of drugs these beneficiaries are prohibited use of this coverage after January 1, 2006.

Congress cited two reasons for prohibiting the sale of Medigap policies. The first reason was that the Congress wanted to ensure that beneficiaries covered some of the cost of their medication and did not overuse medical services. Secondly, the legislatures wanted to prevent the duplication of the new Medicare benefit.

The Medicare drug plan may further limit the use of medications by beneficiaries through the creation of a preferred drug list. In this case only the drugs listed would be covered under Medicare. Patients could not buy private insurance to cover the cost of medication that is excluded form the preferred list.

Furthermore, low-income elderly that qualify for both Medicare and Medicaid would receive their drugs through Medicare. Even though Medicaid covers more medication cost than Medicare, the bill generally prohibits Medicaid programs from supplementing the Medicare drug benefit.