What is Medicare Part D?

Medicare Part D is a prescription drug benefit program that was created through the U.S. Medicare Prescription Drug, Improvement, and Modernization Act of 2003. This law is sometimes also called the Medicare Modernization Act, or MMA.

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 January 1, 2006.

Understanding Medicare Part D

Medicare Part D involves costs that are similar to those found with any standard medical or prescription insurance coverage plan. These costs include premiums, yearly deductibles, and copays. An individual participant’s actual costs will vary depending on several factors, including the specific plan they choose, the medications they use, and the pharmacy they select.

Generally, participants would opt to enroll in Medicare Part D when they first become eligible for the program. Otherwise, they may incur a late enrollment penalty unless they meet certain criteria, such as having other creditable prescription drug coverage. The government categorizes creditable prescription drug coverage as that which is expected to pay at least as much as Medicare’s standard prescription drug coverage.

Eligible individuals who want to enroll in Medicare Part D will first need to evaluate their options and choose a plan. After identifying the plan they want to select, participants can enroll online via the plan’s website or by phone, or by submitting a paper application.

Medicare Part D Choices and Criticisms

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 for participants to choose a plan that meets their needs. People considering in enrolling should also first think about any existing prescription drug coverage they may already have, or options that may currently be available to them. They can then compare their options to determine the choice that would be best for them.

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.