Prescription drug coverage under Medicare has been changed in recent years. Medicare Part D was created by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. It was implemented in 2006. Part D provides an optional prescription drug benefit.
What Is Medicare Part D?
Medicare Part D is a voluntary program providing prescription drug benefits. Beneficiaries can enroll in a stand-alone drug plan or private health plan that offers drug coverage. These plans are administered by private companies, not the government, and beneficiaries pay a deductible, coinsurance and a monthly premium.
The primary prescription drug benefit went into effect in 2006. Since then, all Medicare beneficiaries have had access to an optional prescription drug benefit. This benefit covers 75% of costs up to $2,250 per year.
Cost of Coverage
Beneficiaries of the optional prescription drug benefit must pay a deductible of $250 and premiums of about $35 per month, as well as the remaining 25% of the cost of the drug. There is a gap in coverage once a beneficiary hits the $2,250 cap until an out-of-pocket limit of $3,600 is met (not including premium). At that point, the beneficiary is responsible only for the greater of:
- A copayment of $2 for a generic drug and $5 for any other drug or
- 5% coinsurance
Questions for Your Attorney
- Am I required by law to sign up for Medicare Part D?
- How much coverage do I get under Medicare Part D?
- How much does Medicare Part D cost?