The Medicare drug benefit: update on the low-income subsidy.

Abstract

The Medicare drug benefit (Medicare "Part D"), provides federal subsidies to pay premiums and cost sharing for low-income beneficiaries--almost 10 million in 2009. Yet there are several policy issues concerning these low-income beneficiaries under Part D. First, over 2 million individuals who may qualify for the subsidies have not enrolled. Second, in some states, low-income beneficiaries have little choice of plans (while non low-income beneficiaries have dozens of choices), unless they pay out-of-pocket for premium amounts above what the subsidy covers. And third, millions of those who have enrolled in the benefit face the prospect each year of switching drug plans or paying more to keep their current drug plan. What led to this state of affairs? Are there lessons to be learned from Medicare Part D as Congress debates how to provide health insurance subsidies on behalf of low-income individuals?