Medicare D
Medicare part D is an important part of the Medicare Prescription Drug, Improvement, and Modernization Act enacted in 2003. However, it did not begin to take effect until January 1, 2006. The plan is administered by The Centers for Medicare and Medicaid Services (CMS) . Medicare part D provides insurance coverage on prescription drugs, but is not part of the original Medicare program. Private insurance carriers actually administer the Prescription Drug Plan (PDP) and they are reimbursed by CMS.
There are two private plans under which someone can receive prescription drug coverage; through a Prescription Drug Plan that covers drugs only or through a Medicare Advantage (MA) plan. A MA plan includes both medical services, parts A and B, and prescription drugs. There are about 40 to 50 Medicare part D plans, on average, in each state or CMS region. As of the start of 2008 there are over 1,800 part D plans available. These different plans allow the covered to choose the drugs to be covered, the types of drugs, and therefore the copay they will be responsible for. Average monthly premiums for the standard plans are around $30, but can range from $8-$135. Those enrolled can use a Prescription Drug Plan Finder to figure out the best plan for them based on price, drugs and location. These plans are the best for individuals who regularly take prescription drugs.
The MMA also established a standard benefit plan available to all part D participants. This plan includes a $295 deductible. Once the deductible has been reached Medicare will pay for 75% of prescription drug costs up to a $2,405 initial coverage limit. After this amount is reached, the patient is in what is called "The Donut Hole " or coverage gap. They must now pay the full price of their prescription drugs until total yearly spending has reached $4,350. This means that they will be responsible for $1,945 of prescription coverage. Once they have passed the $4,350 limit, catastrophic coverage is reached, which provides generic medications for $2.25 and brand-name for $5.65, or 5% of total cost, whichever is greater. The standard plan is more suited for infrequent prescription drug users or those who are not taking prescription drugs currently, as a contingency plan.
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