Medicare Part D (Medicare Prescription Drug Coverage)

Also as part of the passage of the Medicare Modernization Act Medicare Part D went into effect on January 1, 2006. Anyone with Part A or B is eligible for Part D. In order to receive this benefit, a person with Medicare must enroll in a stand-alone prescription drug plan or Medicare Advantage plan with prescription drug coverage. These plans are approved and regulated by the Medicare program, but are actually designed and administered by private health insurance companies and private drug companies.

Unlike Original Medicare (Part A and B), Part D coverage is not standardized. Plans choose which drugs they wish to cover, at what level (or tier) they wish to cover it, and are free to choose not to cover some drugs at all.  When choosing a Part D Prescription Drug Plan it is very important to make sure all your medications are covered by the plan.

Part D does have a limit to coverage and this is referred to in the Medicare community as the "doughnut hole".  It refers to a gap in prescription drug coverage under Medicare Part D.  There are three phases to coverage.   In the first phase or the Initial Coverage Phase you will pay copayments for your medications based on those “tiers” I mentioned above.   Your insurance will report all your purchases to Medicare and Medicare will keep track of the TOTAL cost of these drugs.   Once that total has reached a dollar limit set by the federal government the insurance company no longer pays for a portion of your drugs.  You are now responsible for the full cost of your medications.  You are given a discount to help you during this time and those discounts are changing every year as well as the dollar limits as part of the Affordable Health Care Act, gradually narrowing the coverage gap until it disappears in 2020.

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