Understanding Medicare Part D: Prescription Drug Coverage

Part D coverage refers to Medicare's prescription drug plan. Part D provides users with assistance in paying for prescription drugs, although it is not included in the traditional Medicare program.

History

• Part D was added to Medicare in the 2003 Medicare Prescription Drug, Improvement, and Modernization Act. Part D coverage started in January 2006.

Fact

• Because it's not included in traditional Medicare, Part D coverage requires affirmative enrollment. If you're a Medicare user, you must sign up for the plan.

Time Frame

• Part D coverage's annual election period is Nov. 15 through Dec. 31. You enroll at this time for the coming year. If you're already enrolled in Part D coverage, this is the period during which you can change your policy.

Features

• All Part D policies must offer a standard benefit package. In 2009, the standard structure called for a $295 deductible, after which the beneficiary pays 25 percent of prescription costs until she reaches a maximum benefit of $2,700. After that, another deductible is required before more discounts begin.

Types

• Private insurance companies offer hundreds of different Part D coverages, although each one must have benefits in line with the standard benefit package.

Considerations

• Because of annual increases in expenditures, Part D's deductible, initial coverage limit, and out-of-pocket threshold may change every year.