With the enactment of the Medicare Modernization Act of 2003 (MMA), Medicare Part D was established to provide prescription drug coverage for Medicare beneficiaries.
The Affordable Care Act of 2010 (ACA) includes important changes to the MMA. Generally, these changes improved Part D coverage by reducing the amounts beneficiaries were required to pay for various types of prescription drugs, increasing the value of an option known as an Employer Group Waiver Plan with a commercial wrap (EGWP + Wrap).
The GBP would provide standard Part D coverage through a self-funded EGWP and secondary coverage through a self-funded wrap-around (Wrap) arrangement. The Wrap would cover those prescription drugs that are not covered under Part D and would fill in the Part D coverage gap.
Together, the two components would match the prescription drug benefits currently provided under the GBP health plans. Under the EGWP + Wrap, the GBP would qualify for CMS subsidies and manufacturer discounts. These subsidies and discounts provide an opportunity for considerable savings that would help offset the need for drastic benefit cuts