DEFINITION of 'Medicare Part D'
A prescription drug benefit program that was created through the U.S. Medicare Prescription Drug, Improvement, and Modernization Act of 2003. The "D" stands for "drugs". The program gives Medicare recipients these basic choices: stay in traditional Medicare without signing up for the prescription drug benefit outlined in the Act, stay in traditional Medicare and enroll in a Medicare drug plan, enroll in other Medicare plans, or enroll in a comprehensive private health plan (which may or may not cover prescription costs). The program began providing coverage for users on Jan 1, 2006.
BREAKING DOWN 'Medicare Part D'
Those who enroll in the Medicare Part D program choose from a large list of approved drug plans which do not cover all prescription drugs, so it is important that they choose a plan that meets their needs. Senior citizens and seniors' advocacy groups have criticized the program for not being comprehensive enough and adding to the already high costs of getting the drugs that seniors need for medical reasons. As a result of Medicare Part D, a number of insurance products are expected to cover the gaps in prescription drug coverage.