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American's Affordable Health Choices Act of 2009 [i] (August 28, 2009)

handle is hein.congrec/cbo1055 and id is 1 raw text is: CONGRESSIONAL BUDGET OFFICE Douglas W. Elmendorf, Director U.S. Congress Washington, DC 20515 August 28, 2009 Honorable Dave Camp Ranking Member Committee on Ways and Means U.S. House of Representatives Washington, DC 20515 Dear Congressman: As you requested, the Congressional Budget Office (CBO) has estimated the change in Medicare Part D premiums that would result from certain provisions contained in title I in division B of H.R. 3200, America's Affordable Health Choices Act of 2009, as introduced on July 14, 2009. According to CBO's estimates, enacting those changes would lead to an average increase in premiums for Part D beneficiaries of about 5 percent in 2011, rising to about 20 percent in 2019. However, beneficiaries' spending on prescription drugs apart from those premiums would fall, on average, as would their overall prescription drug spending (including both premiums and cost sharing). As with CBO's other estimates related to this bill, the following analysis remains preliminary and does not reflect any modifications or amendments made after July 14. Under current law, the standard outpatient prescription drug benefit under Part D of Medicare has the following features: an annual deductible for which the beneficiary is responsible; a dollar range of coverage in which the beneficiary pays 25 percent of the cost of covered drugs; and a catastrophic threshold above which the beneficiary pays about 5 percent of the cost of covered drugs. In the gap between the end of the initial coverage range and the catastrophic threshold- commonly referred to as the doughnut hole-beneficiaries generally are liable for all of their drug costs. For their Part D insurance coverage, most enrollees pay premiums that finance about 25 percent of the cost of the coverage (on average); the federal government pays the remaining 75 percent. For low-income individuals, however, the federal government subsidizes a larger share of their prescription drug costs, including their premiums and their spending in the doughnut hole. H.R. 3200 proposes several changes to the Medicare Part D program that would affect federal spending: www.cbo.gov

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