Medicare Part D and Prescription Drug Coverage

A Primary Medicare Insurance Supplement for Medicare Parts A and B

Nov 3, 2009

Medicare Part D, which adds prescription drug coverage to Original Medicare (Parts A and B), is one of several Medicare insurance options for seniors 65 and older.

Medicare insurance, in its original form, did not have comprehensive prescription drug coverage included for beneficiaries aged 65 and over. However, this changed when, in 2006, the Medicare Prescription Drug, Improvement and Modernization Act went into effect, thus creating Medicare D.

Medicare Part D, which is available for consumers with Original Medicare, has open enrollment between November 15 and December 31 each year. By understanding what Medicare Part D is and knowing what some of the other Medicare insurance options available are (including Medicare Advantage plans and Medigap supplemental insurance options), consumers over 65 can responsibly choose the proper prescription drug coverage that works best as a health care option.

What is Medicare Part D?

Medicare D offers supplemental prescription drug coverage for anyone who is a beneficiary of Medicare, regardless of health conditions or income levels. Often referred to as Medicare Prescription Drug Plans (PDP), Part D insurance plans are offered by private insurance companies (such as Humana and Aetna) which Medicare has negotiated with and approved.

There are a number of different PDPs which offer different levels of prescription drug coverage at different costs. It is for this reason that Medicare beneficiaries, who elect to purchase a Medicare Part D plan, must shop around for the plan which best fits their needs. Additionally, since Medicare Part D is supplemental and offered by private insurers, it is necessary for beneficiaries to actively enroll in a plan of choice.

Medicare Part D Costs

Those who enroll in Medicare D benefit from lower prices on prescription drugs negotiated by the government. Additionally, beneficiaries have greater access to a wide variety of generic drugs offered in PDPs, which are generally much less expensive than name-brand drugs.

Since Part D is an optional Medicare supplement, those who purchase a PDP must pay a monthly premium and standard yearly deductibles. These premium costs and deductible levels depend upon the particular plan selected by a beneficiary. While Medicare insurance sets basic minimum coverages that must be offered by approved private insurance companies, the plans can vary substantially.

While there are no income requirements for eligibility, lower income individuals can receive additional benefits (called Extra Help by Medicare), such as lower deductibles and low out-of-pocket expenses.

Medicare beneficiaries who elect not to enroll in a PDP when they are first eligible might have to pay a late enrollment penalty if they choose to enroll at a later date. It is for this reason that it may be wise to enroll in Medicare D upon becoming eligible, even if prescription drug needs are low at the time, for this can save costs further down the road.

Medicare Part D National Plans

While private insurance companies offer a myriad of plans specialized by region or state, there are also a number of national plans available which have standardized, cross-regional coverage. (The benefit of such plans is that a beneficiary might not need to switch plans if they move out of a normal coverage area.)

According to the U.S. Department of Health and Human Services, below is a list of some of the private insurance companies and their national plans being offered for those interested in enrolling in Medicare Part D:

It should be noted that at this stage, national plans do not offer additional low income help.

Medicare Part D Prescription Drug Coverage and Medigap

For Medicare beneficiaries, there are a number of ways to acquire prescription drug coverage. While for many, Medicare D will be the right option, others may want to look at bridging their drug coverage with Medigap. (For beneficiaries interested in choosing a Medigap policy, it's important to compare Medigap costs with Medicare Part D before proceeding.)

Additionally, Medicare Advantage plans offer comprehensive medical and drug coverage. However, it should be noted that a consumer may only choose one option for drug coverage—Medicare D, Medigap, or a Medicare Advantage plan.

For expanded details on the information contained in this article, see Medicare.gov, where much of the information in this article was gleaned.

The copyright of the article Medicare Part D and Prescription Drug Coverage in Seniors' Health/Medicare is owned by David Harris-Gershon. Permission to republish Medicare Part D and Prescription Drug Coverage in print or online must be granted by the author in writing.