Medicare Part D

Prescription Drug Plans

Medicare Parts A and B do not include prescription drug coverage. On January 1, 2006, Medicare began coverage of an outpatient prescription drug benefit to all Medicare beneficiaries. The new benefit, called Part D of the Medicare Program, is designed to lower the cost of prescription drugs for most senior and disabled Medicare beneficiaries.

People on Medicare, Part A or B, who would like to receive prescription drug coverage under Part D have to enroll in a private insurance policy that offers Part D coverage and is approved by Medicare. These plans are called Medicare Prescription Drug Plans (PDPs). You can sign up for the drug benefit from time to time based on needs and Medicare coverage.

Signing up for Basic Medicare Part D

Medicare Part D offers prescription drug coverage. If you already have an insurance policy that covers prescription drugs when you sign up, you will have to choose between your current policy or a new policy and basic Medicare Part D. You will receive notification of whether or not your existing coverage is "creditable" (equal to or better than Medicare Part D). There are premium penalties for signing up later than May 15, 2006 if your existing coverage is not creditable.

Signing up for Medicare Prescription Drug Plans (PDP)

Medicare Prescription Drug Plans (PDPs) offer prescription drug benefits. Drug plans vary in what prescription drugs are covered, how much you have to pay and which pharmacies you can use. Like any other insurance, if you join you pay a monthly premium and pay a share of the cost of your prescriptions.

Advantages of a PDP vs. Basic Medicare Part D

PDP plans offer possible advantages in cost value, types of drugs and combinations of services, such as preventive care. Premiums might be equal to or more than those of the basic Medicare Part D Program. In any case, they must at least offer the same basic coverage as Medicare Part D.