Report says Medigap-like reforms won't fix Part D

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Legislative action aimed at fixing the confusion associated with the array of plans under the new Medicare drug benefit could be premature, according to a new report from the Congressional Research Service. Hundreds of thousands of nursing home residents, as well as other seniors, have had their prescription drug regimens affected by the new Part D benefit.

The CRS report, "Standardized Choices: Medigap Lessons for Medicare Part D," compares the myriad issues surrounding Part D with those of Medigap, which has existed since the 1970s. It considers whether standardization might lead to improvements in the marketplace.

The conclusion: The Part D benefit is new and the market is expected to consolidate — both in the number of companies and products. The Medigap market, on the other hand, was quite mature at the time of that program's reforms in the early 1990s. Also, the report points out that Medicare is primarily the responsibility of the federal government and Medigap is the states' territory.

Any policy decision should consider not only whether and how to standardize benefits but also when to do so, report authors state.

A summary of the report is available at www.opencrs.com/document/RL33300.