What is Medicare Part D?
Prescription Drug Coverage

Medicare Part D is a federal program to subsidize the costs of prescription drugs for Medicare members. It was enacted as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) and went into effect on January 1, 2006.

Now what does it really mean?

A major hole in the original Medicare program is for medication coverage. Medication costs as a percentage of total medical expenditure have increased significantly since the original Medicare program started. In light of this change, Part D was added as an option.

Part D is voluntary and handled separately from Medicare supplements Part A and B of Medicare alone. Medicare enrollees would pay a separate monthly premium (can also be deducted from the social security payment). There are many carriers that offer a Part D benefit. Most have two to three options to choose from. They typically range from about $20 to about $40 monthly. They tend to have separate copays for generic and brand name medications. This coverage will become a commodity going forward so if it is too good to be true...it probably is. There are plans on the market that are very cheap but they do not cover much. They are termed "place holders" since they allow a person to avoid the penalty for not signing up for Part D. Part D is very different from most other coverage in that you can change plans regardless of health Nov 15th through Dec 31st of each year. One quick note...the so called "donut hole". After your total medication costs hit $2250, you will have to pay for your medication costs until you personally pay $3600 annually out of your pocket. There are some plans that cover this donut hole but they will likely be priced out of the market over time...again...part of the "too good to be true" scenario.

Some of the options may make a distinction between types of drugs you are able to cover. This is termed the "Formulary" or the allowable list of drugs. The options usually differ between 1) formularies; 2) deductibles; or 3) copay amounts.

The rates are not locked in stone and they can change each year so it is important to choose a stable company. Many carriers entered the market when Part D started and based on their plan offerings and pricing, we do not expect them to be competitive for long. The "Blues" tend to be more conservative so they are a good starting point. Again, if pricing is in the $25-$40 range, that's a good estimate of solid pricing.

Part D will require a separate application from the Medicare Supplement. You can request this application form or quote directly from us. We also attach information on the most competitive Medicare Supplement for your area and age to make sure you have the best information.