Medicare is a health insurance program administered by the federal government. Medicare was designed to provide health care specifically for the elderly and disabled in the United States at affordable costs. Though Medicare’s history goes back to the 1960s, Part D, Medicare’s prescription drug benefit, was not introduced until the 21st century.
History
The Part D prescription drug program was created as a part of the Medicare Prescription Drug, Improvement and Modernization Act in 2003. Beneficiaries had access to the benefit beginning in January 2006.
Plans
Medicare beneficiaries can receive Part D in one of two ways. If they have traditional Medicare, a Private Fee for Service (PFFS) plan or a Medicare Savings Account (MSA), then they can enroll in a stand-alone Part D plan, purchased from a private insurance company of their choice. If a beneficiary decides he would like to receive his Medicare benefits through a Medicare Advantage plan that is not a PFFS or MSA account, he must purchase all of his health benefits, both medical and prescription, through one plan.
Eligibility
Any Medicare eligible individual may elect to take Part D. To be Medicare eligible, a person must be either be 65 and older, disabled or diagnosed with either end-stage renal disease or amyotrophic lateral sclerosis.
Coverage
Each Part D private prescription drug plan sets its own formulary, or list of drugs, that it covers, and this formula is subject to change annually. Some drugs are excluded from coverage by Medicare law, including over-the-counter drugs, benzodiazepines, barbiturates and drugs taken for weight loss.
Coverage Gap
Each year, if a beneficiary’s total drug costs reach a certain amount, then he will enter a period known as the coverage gap. During the coverage gap, the Part D plan no longer pays for any prescription drugs until the beneficiary’s out of pocket costs, meaning the total amount that he pays for himself, reaches a certain number.