According to the Kaiser Family Foundation, more than 27 million people were enrolled in Medicare Part D in 2010.
Medicare Part D is insurance for prescription drugs only. Part D benefits can be gained through either a standalone plan which can be added to Original Medicare Parts A and B, or through Part C Medicare Advantage plans, which combine the benefits of Part A and B and make them available through private insurance companies. Since Part D is also sold by private insurance companies, some details of the plans can vary.
Standard Deductible
Most Part D plans come with a annual deductible. This is the amount the customer must pay before insurance benefits will begin. Deductibles can vary depending on the company and the exact plan purchased. As of 2011, however, the standard deductible amount for most Part D plans was $310. Not all Part D plans have an annual deductible.
Covered Prescriptions
The kinds of drugs covered depends on which plan you purchase. Some offer coverage for both name-brand and generic drugs, while other offer benefits for only one. Part D plans also may not always offer coverage for all prescription drugs. If a Medicare beneficiary knows that he needs Part D to cover specific medications, he can use the Medicare Plan Finder (see Resources) to find appropriate coverage.
Not Covered
Medicare Part D does not have benefits for every kind of medication. Not covered under any plan are over-the-counter medications such as pain relievers or cold medicine. Fertility drugs are not covered through Part D, either, along with anti-seizure and anti-anxiety drugs, prescriptions for losing weight or for gaining it, drugs used for cosmetic purposes and prescription vitamins. Drugs covered by Medicare Part A or Part B are not covered by Part D.
Doughnut Hole
One of the most confusing aspects of Part D Medicare is what is called the "doughnut hole." Part D comes with an initial coverage limit. This can change by plan, but as of 2011 is mostly around $2,800. After the retail costs of a customer's drugs reach this amount, Part D coverage stops. This is the doughnut hole. While in the hole. an individual must pay all costs for prescriptions. He must also continue to pay monthly premiums to keep the insurance. Only when the total cost of drugs reaches the catastrophic threshold ($4,550 in 2011) will benefits resume. In 2011, reforms aimed at helping close the doughnut hole went into place, giving discounts on both name-brand and generic drugs to Medicare beneficiaries while in the hole. Some Part D plans also offer gap coverage, which offers some benefits while customers are in the hole.
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