Seniors and disabled Americans will not be able to buy supplemental insurance to cover their share of prescription drug costs under the new Medicare bill, the legislation says. A provision in the legislation bans the sale of any gap policy that covers out-of-pocket drug expenses after Jan. 1, 2006, when the new Medicare drug benefit takes into effect.

Millions of Medicare beneficiaries have bought “Medigap” insurance to cover what Medicare doesn’t.

According to the New York Times congress provided two reasons for prohibiting the sale of Medigap drug policies. “Lawmakers wanted to prevent duplication of the new Medicare benefit. They also wanted to be sure that beneficiaries would bear some of the cost. Health economists have long asserted that when beneficiaries are insulated from the costs, they tend to overuse medical services,” New York Times reported.

(via New York Times)