What is Medicare Part D?
Medicare is a government program that provides medical insurance to citizens over the age of 65. It's predicated on and reinforces the two pillars of American medicine, synthesized pharmaceutical drugs and private, for-profit health care.
History
When it was signed into law in 1965 by Lyndon Johnson, Medicare did not originally offer prescription drug coverage; it was limited to hospital care, under Part A, and physician and outpatient care, and medical equipment, under Part B. The growing number of new pharmaceutical drugs, however, and the demand by seniors for access to them, led Congress to pass the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, creating new coverage for prescription drugs, under Parts C and D.
Types
Those enrolled in Medicare have several options for their drug benefit plan. In all cases, Medicare regulates the plans, but they are all designed and offered by private insurance companies, which results in wide variance. Part D provides for a Prescription Drug Plan, or PDP, that generally covers all prescriptions drugs except benzodiazapines, cough suppressants and barbiturates, though the extent of coverage varies widely. Alternatively, Medicare beneficiaries can join a Medicare Advantage plan, or MA, created under Part C, which combines privately administered benefits of Parts A and B with some aspects of Part D PDPs.
Features
Medicare Part D prescription drug coverage comes through private insurers who are reimbursed by the Federal government. Like any other private insurance, Medicare costs beneficiaries a monthly premium and an annual yearly deductible. There are also copays due when purchasing prescriptions. The extent of the costs and the access to medication will depend on the specific plan, and in some cases, low income individuals may have their premiums or deductibles waived. Plans that offer greater access to medication will usually do so at a higher cost.
Benefits
Though it's far from perfect, Medicare Part D lowers the cost of prescription for most qualifying seniors, who, on top of their deductible and premiums, only pay 25 percent of covered drugs on the first $2,510 annually. If their total out-of-pocket expenses reach $4,050 they become eligible for "Catastrophic Coverage" entitling them to pay the greater of either 5 percent or $2.25 for a generic or preferred drug and $5.60 for other drugs.
Warning
Unfortunately, the structure of the Medicare Part D benefits leaves a gap, called the "donut hole," for those whose costs exceed $2,501 but do not reach Catastrophic Coverage level. Furthermore, these figures are recalculated annually, so a beneficiary who received Catastrophic Coverage in one year, may fail to qualify for the same benefits unless their costs again exceed the threshold.
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