What is Medicare Part D? How it works and what it covers
Medicare Part D refers to the prescription drug program that was established in 2006, as a result of the ‘Medicare Modernization Act (MMA)’ signed by President Bush in 2003. It is a voluntary part of Medicare, available through Medicare approved private insurance companies, and is commonly referred as PDP (Prescription Drug Plan) or simply Part D.
Part D is available to anyone on Medicare regardless of any existing health issues. Enrollees select a plan from options available in their geographic area and have to pay a monthly premium for the coverage to the insurer. Although enrollment is voluntary there may be a late enrollment penalty for those who do not enroll when they are first eligible.
There are two types of prescription drug plans:
- Stand-alone prescription drug plans (PDP). This type of plan provides prescription drug benefits for people who elect to stay with original Medicare (with or without a Medicare supplement plan). While all of the private insurers offering PDP plans must offer at least a standardized coverage set by Medicare, additional plan benefits and formularies as well as costs such as monthly premiums, deductibles, copays may vary widely among providers. Some of these plans even offer to help with coverage for generic drugs during the so called “donut hole.”
- Prescription drug coverage included in a Medicare advantage plan (MA-PD). If you opt for a Medicare advantage HMO or PPO plan, you basically replace your original Medicare, and your coverage for medical services will be provided by the MAP. While all MAP’s must by law provide at least the same coverage as original Medicare Part A and B (which does not include prescription drugs), many policies include additional benefits such as prescription drug coverage, at the same cost as your Medicare Part B premium, or for additional costs. To be able to offer these advantages, the insurers typically restrict the coverage for these medical services to a network of health care providers that must be used by the enrollee.
How to enroll in a Part D plan?
Typically, you may enroll in a Part D plan either when you first become eligible for Medicare, under specific approved circumstances, or during the annual open enrollment period in fall of each year. You can read more about enrollment requirements and procedures here.
For persons with qualifying income and limited resources, the Social Security Administration offers an Extra Help program, which may assist with premiums, deductibles and/or co-payments associated with a Part D plan. You may check out if you qualify for Extra Help by visiting your local Social Security office, or calling the Social Security Administration at (800) 772-1213.
