CMS Seeks Help with Drug Benefit Subsidy Options

CMS has asked employers that sponsor retiree drug benefits for their feedback on the proposed implementation of the employer/plan sponsor subsidy provided for in the MMA. In a discussion paper, CMS acknowledged the uncertainty of how employers and unions will react to the new Medicare drug benefit

CMS lists four policy goals for the subsidy:

* Maximize the number of retirees with employer-provided retiree drug coverage and the generosity of the coverage

* Preclude "windfalls" by ensuring that plan sponsors contribute to retiree drug coverage at least as much as Medicare pays them as a subsidy

* Minimize administrative burden while maximizing flexibility for employers and unions

* Limit overall budgetary costs

CMS asked employers to tell CMS what actions they are likely to take related to each option the paper set out for achieving these goals.

To read the CMS discussion paper on the employer subsidy, go to www.cms.hhs.gov/opendoor/ retireewhitepaper.pdf.

To read the MMA provisions on drug benefits, go to HFMA's bookmarked full-text version of the law www.hfma.org/resource/focus_areas/medicare/ 400274.pdf.