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[email protected]. Evaluation of the Medicare Demonstration to Transition Enrollment of Low Income Subsidy Beneficiaries June 2009 Grecia Marrufo Margaret O’Brien-Strain Nick Theobald Teresa Lau Eric Verhulst Nashat Moin Acumen, LLC 500 Airport Blvd., Suite 365 Burlingame, CA 94010 EXECUTIVE SUMMARY Authorized by the Medicare Modernization Act of 2003 (MMA), the prescription drug program known as Medicare Part D administers benefits to over 26 million beneficiaries through private drug plans. These plans include standalone prescription drug plans (PDPs) and Medicare Advantage prescription drug plans (MA-PDs) that offer drug benefits combined with managed care coverage for standard Medicare services. MA-PDs offer prescription drug benefits only to enrollees who also receive Part A and/or Part B coverage through the same MA parent organization, while PDPs offer coverage to beneficiaries specific to a geographic region; there are 34 prescription drug regions defined by the Centers for Medicare & Medicaid Services (CMS). Medicare pays for up to 75 percent of the cost of an average plan, with beneficiaries paying the rest in premiums. The MMA also mandated that CMS establish the Low-Income Subsidy (LIS) program, which provides subsidies that reduce or eliminate premiums and deductibles and offers zero or reduced co-payments for low-income beneficiaries.