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The Best Medicine: A Drug Coverage Option Under Original Medicare

Original Medicare provides coverage for hospital and outpatient medical services by enrolling all older adults and people with disabilities, regardless of health or financial status, into a single risk pool and providing a uniform premium subsidy and cost-sharing structure. Coverage is guaranteed for all “reasonable and necessary” medical services, with the exception of those excluded by law, such as most dental and vision care. People can go to practically any doctor or hospital in the country, and they can purchase supplemental insurance (Medigap policies) to cover their out-of-pocket costs. By contrast, if people need Medicare prescription drug coverage under Part D, they can only get it by purchasing coverage, with the help of a premium subsidy from Medicare, from one of the dozens of competing prescription drug plans available in their area. This radically different structure has a profound impact on people with Medicare.