Medicare Prescription Drug, Improvement, and Modernization Act
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| Long title | An act to amend title XVIII of the Social Security Act to provide for a voluntary prescription drug benefit under the medicare program and to strengthen and improve the medicare program, and for other purposes. |
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| Acronyms (colloquial) | Medicare Modernization Act or MMA |
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| Public law | 108 - 173 |
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The Medicare Prescription Drug, Improvement, and Modernization Act, also called the Medicare Modernization Act or MMA, is a federal law of the United States, enacted in 2003. It produced the largest overhaul of Medicare in the public health program's 38-year history.
The MMA was signed by President George W. Bush on December 8, 2003, after passing in Congress by a close margin.
The MMA's most touted feature is the introduction of an entitlement benefit for prescription drugs, through tax breaks and subsidies.
In the years since Medicare's creation in 1965, the role of prescription drugs in patient care has significantly increased. As new and expensive drugs have come into use, patients, particularly senior citizens at whom Medicare was targeted, have found prescriptions harder to afford. The MMA was designed to address this problem.
The benefit is funded in a complex way, reflecting diverse priorities of lobbyists and constituencies.
Beginning in 2006, a prescription drug benefit called Medicare Part D was made available. Coverage is available only through insurance companies and HMOs, and is voluntary.
Enrollees paid the following initial costs for the initial benefits: a minimum monthly premium of $24.80 (premiums may vary), a $180 to $265 annual deductible, 25% (or approximate flat copay) of full drug costs up to $2,400. After the initial coverage limit is met, a period commonly referred to as the "Donut Hole" begins when an enrollee may be responsible for the insurance company's negotiated price of the drug, less than the retail price without insurance. The Affordable Care Act, also commonly known as "Obamacare", modified this measure.
With the passage of the Balanced Budget Act of 1997, Medicare beneficiaries were given the option to receive their Medicare benefits through private health insurance plans, instead of through the Original Medicare plan (Parts A and B). These programs were known as "Medicare+Choice" or "Part C" plans. Pursuant to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, the compensation and business practices for insurers that offer these plans changed, and "Medicare+Choice" plans became known as "Medicare Advantage" (MA) plans. In addition to offering comparable coverage to Part A and Part B, Medicare Advantage plans may also offer Part D coverage.
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