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.

Overview Evolution of Medicare

Medicare Prescription Drug Benefit