US Medicare offers revamped coverage final rules

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The U.S. Medicare program released final rules on Friday outlining government requirements for companies that want to offer prescription drug coverage plans for the elderly starting in 2006.

The rules also spell out subsidies for employers that maintain health benefits for retirees and instructions for health insurers that want to offer coverage through a program called Medicare Advantage.

Under a law signed by President George W. Bush in 2003, Medicare will cover a broad range of prescription medicines starting next year. The federal health insurance plan, which covers 41 million elderly and disabled Americans, does not now cover most drugs.

Pharmacy benefit managers, health insurers and large employers grappling with rising health-care costs are expected to scrutinize the new rules to determine whether they will participate in the revamped system.

Medicare’s new regulations aim to provide “a very clear path” for interested companies and beneficiaries, Centers for Medicare and Medicaid Services Administrator Mark McClellan said.

The new drug coverage plans will replace temporary savings cards offered since last June by companies and other groups like Walgreen Co. and AARP, the nation’s largest lobby group for the elderly.

One group of elderly who will be largely affected are poorer ones who currently receive medicines through the joint federal-state program Medicaid but will get them through Medicare under the new law.

The switch, along with subsidies for retiree drug benefits and other assistance, will save states an estimated $8 billion in the first five years of the drug coverage benefits, McClellan said. 

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