In 2002, total outpatient drug costs for adults over 65 were estimated at $87 billion, and they will rise to over $120 billion by 2005.(Brinckerhoff 2005) This presented conflicts in patients affording proper prescription drug treatments and physicians ordering affordable treatments for their patients. In response to rapid increasing drug costs retirement health plans along Medicare advantage plans have scaled back on coverages for prescription drugs. This is the main reason why government introduced drug discount cards as one of the provisions of Medicare Prescription Drug Improvement Act. Although these discount drug cards came with restrictions such as the ability to use one card a time in a calendar year; along with various pharmacy restrictions. Another emerging provisions was the 75% prescription drug coverage when Medicare beneficiaries met their total out-of-pocket expense but it was capped at $2,250. The Medicare Modernization Act gave the beneficiaries a choice of at least 2 qualifying plans in their area under HMO or PPO under Medicare Advantage plan. These multiple individual plans were responsible for negotiating prices with drug manufactures on an individual …show more content…
Introducing private plans created market based competition amongst healthcare plans providing better coverage at more affordable prices. The private market competition takes control away from politicians and bureaucrats dictating benefits/prices; into the hands of knowledgeable health care market experts in the industry. For the first time legislation put forth a fiscal safeguard in consistently measuring the Medicare Trust Fund in warning congress and the president when funds exceed 45%. This provides a foundation to keep adequate revenue levels above the threshold, provides warning, and creates opportunity in stressing improvement in improving the medicare