Abstract
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003
(commonly known as the Medicare Modernization Act, or MMA) is arguably the
most significant development in U.S. health care policy in recent years. The
dominant feature of the MMA is a major new prescription drug benefit that is
scheduled to take effect on January 1, 2006. The U.S. health care system has
spent much of 2005 gearing up for the launch of this benefit; in this report,
we examine progress to date. We begin with a review of the evolution of the
Medicare program and an overview of the key features of the new prescription
drug benefit. We then consider employers' responses to Medicare drug coverage
and enrollment in Medicare prescription drug plans. We also analyze the
prescription drug plan designs of the three main types of providers-national
prescription drug plan organizations (PDPOs), stand-alone plans, and Medicare
Advantage drug plans. We conclude with an assessment of the outlook and
implications for the main stakeholders in the Medicare drug benefit: Medicare
beneficiaries, employers, prescription drug plans, government, and the
pharmaceutical industry.
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