Medicare Part D: Simplifying the Program and Improving the Value of Information for Beneficiaries

Many Medicare beneficiaries signed up for the new Part D benefit during the program's first two years. Subsequently, a significant majority of them reported that the benefit was too complicated, and some observers suggest that the complexity may have thwarted some beneficiaries from finding the plan that was best for them. Meanwhile, more than 4 million of those eligible failed to enroll at all. Although some degree of standardization may occur naturally as the market evolves, steps can be taken to simplify the program and make it easier for beneficiaries to make good choices among plans—and for them to enroll in the first place. This issue brief considers specific options for simplifying Part D in several areas: standardizing the benefit descriptions and procedures used by plans and the Medicare program; further standardization of the plan's benefit parameters, particularly the rules for cost-sharing; and changes to the rules governing plan formularies.