The U.S. government created the Medicare Part D program as a way to assist seniors with prescription drug costs. Part D plans are administered through private insurance companies unlike the government-issued Medicare Parts A and B coverages. Part D plans give Medicare recipients a selection of plan types to choose from, lower overall drug costs and additional coverage benefits for spouses and children.
Plan Types
As Medicare Part D plans are sold through private insurance companies, plan coverages and rates vary from company to company. Optional Part D coverage is purchased in addition to an existing Medicare Plan. Prescription coverage is included in Medicare Advantage Plans or managed care plans such as HMOs or PPOs. With Medicare Advantage plans, Part A and B coverage is required, whereas only Part A coverage is required with Medicare Prescription Plans.
Reduced Costs
The drugs covered by Medicare Part D appear on a list that contains the most commonly used drugs by Medicare participants. Medicare Part D pays a portion of the costs for both generic and brand name drugs. As long as a prescription falls within the list of approved drugs, Part D benefits will cover a portion of its cost. Benefit coverages vary depending on the type of plan a person has, although plans that pay a substantial portion for brand name drugs may run higher than those that cover mostly generic brands. Medicare participants can enroll for Part D coverage as soon as they become eligible for Medicare.
Plan Costs
The cost of a Medicare Part D plan can vary depending on a person's income level. Income levels determine Part D plan costs for Medicare Prescription Drug Plans, Medicare Advantage Plans or Medicare Fee-for-Service Plans. Income level is based on a person's adjusted gross income from their most recent tax return. As of 2011, single participants with an annual income over $85,000 and couples with a combined annual income over $170,000 pay higher Part D premiums. Participants who fall within low-level categories may quality for additional coverage benefits through Medicare Savings Programs. These programs can pay as much as 95 percent of a person's prescription costs.
Beneficiary Coverage
Medicare Part D benefits also cover prescriptions for participant beneficiaries, including spouses and children. These benefits pay 75 percent of a person's yearly prescription costs once a $310 deductible has been paid. As with participant benefit guidelines, coverage gap periods apply with beneficiary benefits. According to FamiliesUSA, a healthcare reference site, in 2011 coverage gap periods for beneficiaries begin at the $2,840 mark and end at the $6447.50. Any annual costs incurred during the coverage gap period are covered at 50 percent for brand name drugs and 93 percent for generic drugs.
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