Looking to the Future of Medicare Part D

BACKGROUND: The future of the Medicare Part D benefit is of concern for all parties who are stakeholders in the health care system. There are a number of issues that are likely to emerge in the coming years that will have a significant impact on the future of Medicare Part D. OBJECTIVE: To explore some issues that are most likely to affect the future viability of Medicare Part D. SUMMARY: Medicare is one of the largest and fastest growing federal entitlement programs, and given the rapid increases in the cost of medical care, the long-term viability of the system is an ongoing concern. At the same time, the Medicare Part D marketplace is undergoing rapid change that is likely to continue for some years. While the initial design of Part D was intended to provide a wide choice of drug benefit plans, it is not clear whether the variety of plans will continue as the program evolves from the initial enrollment period. It is probable that the number of stand-alone prescription drug plans (PDPs) will decline as plans consolidate and merge into larger organizations that are better able to compete with the more cost-effective plans. Among the changes that are being investigated by the Centers for Medicare & Medicaid Services (CMS) are the mandatory enrollment of complex patients, such as the disabled, blind, and aged, the introduction of medical savings accounts, and increasing focus on the needs of low-income beneficiaries. CONCLUSIONS: As the Medicare Part D drug benefit evolves beyond the initial roll out, there are significant concerns about how the benefit will be structured and financed in the future. The financial viability of Medicare is a major concern for all players in this market and financial constraints will continue to drive policy decisions at all levels.