2005: Medicare begins covering a "Welcome to Medicare" physical, along with other preventive services, such as cardiovascular screening blood tests and diabetes screening tests. Medicare begins education and outreach activities to implement the 2006 prescription drug benefit.

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2005:
• Part A Deductible: $912/year
• Standard Part B Premium: $78.20/month
• Medicare Advantage Enrollment: 5.1 million
• Total Medicare Beneficiaries: 42.6 million
• Total Medicare Spending: $325 billion

November 15, 2005 - May 15, 2006 was the first open enrollment period for the new Part D drug benefit, in which Medicare beneficiaries could enroll in a Medicare Prescription Drug Plan (PDP) or a Medicare Advantage Prescription Drug Plan (MAPD).

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2006:
• Part A Deductible: $952/year
• Standard Part B Premium: $88.50/month
• Average Part D Premium: $32.30/month
• Medicare Advantage Enrollment: 6.5 million
• Part D enrollment: 22.5 million (as of June 11, 2006)
• Total Medicare Beneficiaries: 43.4 million
• Total Medicare Spending: $374 billion

In January 2006, the Medicare Drug Benefit went into effect and Medicare beneficiaries began receiving subsidized prescription drug coverage through Part D plans. As required by law, the Medicare Trustees calculated for the first time that general revenues will exceed 45% of total Medicare outlays within a seven-year period.

2007:
• Part A Deductible: $992/year
• Standard Part B Premium: $93.50/month*
• Average Part D Premium: $27.35/month (CMS, August 2006)
• Medicare Advantage Enrollment: 7.9 million
• Part D enrollment: 23.9 million (as of January 31, 2007)
• Total Medicare Beneficiaries: 44.1 million
• Total Medicare Spending: $426 billion

*Starting in 2007, Medicare beneficiaries with higher incomes (more than $80,000/individual; $160,000/couple) began paying a higher monthly Part B premium based on their modified adjusted gross income, ranging from $105.80 to $161.40 per month, depending on their income.

For the second consecutive year, Medicare Board of Trustees calculated that general revenue will exceed 45% of Medicare funding within the succeeding seven years, triggering a “Medicare funding warning.”

In December of 2007, the Medicare, Medicaid, and SCHIP Extension Act of 2007 (PL110–173) was signed into a law. The Act prevented a 10.1 percent reduction in Medicare physician payments that was scheduled for 2008 and gave physicians a 0.5 percent increase through June 30, 2008.

2008:
• Part A Deductible: $1024/year
• Part B Premium: $96.40/month*
• Average Part D Premium: $27.93/month (CMS, August 2007)
• Medicare Advantage Enrollment: 9.4 million
• Part D enrollment: 25.4 million (as of January 31, 2008)
• Total Medicare Beneficiaries: 44.8 million
• Total Medicare Spending: $444 billion

In July 2008, The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) was signed into law (PL 110-275). The bill prevented a reduction in physician fees through the end of 2008, and increased fees by 1.1 percent through 2009. The cost of the postponement of physician fee cuts was offset by cutting bonus payments to Medicare Advantage plans. The Act also provided benefit improvements; it reduced coinsurance for mental health visits, eliminated the deductible for the welcome to Medicare exam, and increased allowable resources for low-income beneficiaries applying for the Medicare Savings Programs (MSP) and modified the definition of excludable assets in determining Low-Income Subsidy (LIS) program eligibility. The law also prohibits deeming of providers for Private Fee-for-Service plans in certain counties.
In response to the "Medicare funding warning" issued in 2007, the President submitted proposals to Congress to reduce the share of general revenues as a share of total spending, as required by law. The Medicare Trustees issued a "Medicare funding warning" in 2008, as required by law, indicating general revenues would exceed 45percent of total Medicare spending within a seven-year period.

*Medicare beneficiaries with incomes exceeding $82,000/individual and $164,000/couple pay income-related Part B premiums of up to $238.40.