Medicare Part D Prescription Drug Plans

Beginning January 1, 2006, a prescription drug benefit, called Medicare Part D, was made available. It was created to assist in making drug coverage more affordable for Medicare beneficiaries. Medicare Prescription Drug Plans are available through private insurance companies that are contracted with Medicare. The Center for Medicare and Medicaid Services created the structure for the Part D plan and the insurance companies must adhere to their guidelines.

To Enroll or Not to Enroll

Some people who aren't taking prescription medications may think they do not need to enroll in Part D when they become eligible for Medicare. However, if you delay signing up when you are first eligible, without other creditable drug coverage, you may incur a late enrollment penalty if you enroll later. You would then pay the penalty for as long you have prescription drug coverage. We recommend meeting with one of our agents prior to becoming Medicare eligible to make sure you are aware of your choices so you can avoid paying a penalty.

Two Ways to Get Prescription Drug Coverage

Currently, if you do not have other creditable drug coverage, there are two ways to obtain Medicare Part D:

• Through a Stand-Alone Medicare Prescription Drug Plan (also referred to as PDP) which adds prescription drug coverage to Original Medicare, as well as Medicare Medical Savings Account (MSA) plans, some Medicare Cost Plans and some Medicare Private Fee-for-Service (PFFS) plans. These stand-alone PDP's typically have a monthly premium and annual deductible, in addition to copays & coinsurance for each covered medication.
  

• Through a Medicare Advantage plan that includes prescription drug coverage.

Each plan that offers Part D coverage has their own list of drugs that are covered and a tiered formulary that determines the cost of the copays and coinsurance for each drug. There is a network of pharmacies for each plan and some have preferred pharmacies that may offer even lower copays.