Medicare Part D is the prescription drug portion of the new Medicare Prescription Drug, Improvement, and Modernization Act of 2003. Part D was designed to subsidize the costs of most medications issued to US citizens, where there are some of the highest prices of prescription drugs in the world. Although the Act was brought in during 2003, Part D did not take effect until January 2006.
Eligibility for Part D is reliant upon eligibility to either Part A or B of Medicare. If a beneficiary holds a private plan such as Prescription Drug Plan or Medicare Advantage plan, they can access Part D through the private plan. Some private plans, and indeed even a portion of Part C, cover both medical services and medications. However it is important to understand that not all drugs are covered by the same level of drug plan. If a cheaper alternative is available at a lower level plan, it must be used.
The drug plan under Part D is defined by its structure, not by the needs of the beneficiary. Therefore, across the board, every beneficiary must pay $310 deductible and 25% of the drug costs up to a coverage limit of $2830. When this limit is exceeded, the beneficiary must pay 100% of drug costs up to $4550. When an individual reaches this phase they have entered the “Donut Hole”, an area where there is a coverage gap between initial drug coverage and catastrophic drug coverage. Beyond the Donut Hole, the beneficiary pays 5% of the drug costs until the end of the calendar year. In January deductible is paid once again and the climb to coverage limits begins anew. In addition to the above costs, there is also a monthly premium paid to Medicare by the beneficiary. In general, the premiums are about $30 to $40. For those living well below the poverty line there are low-income subsidies. Monthly premiums may be covered, the annual deductable, even some drug payments. » Read more: Medicare Part D Overview
