Medicare Part D - Prescription Drug Coverage

In 2006 the federal government created Medicare Part D and eliminated prescription drug coverage from Medigap or Medicare Supplement insurance. Under Medicare D, those with original Medicare can purchase a Medicare Prescription Drug Plan (PDP) for additional prescription drug coverage, or they may opt out of original Medicare for a Medicare Advantage plan that provides for Medicare Part A, and Part B, as well as Part D prescription drug coverage, sometimes referred to as MA-PD.

Everyone enrooted in Medicare is eligible for Part D prescription drug coverage regardless of age, physical condition, medications being taken, or income. Within the limits of the particular plan, Medicare Part D prescription drug coverage pays for both prescription and non-prescription medications.

You may enroll in Part D when you first become eligible for Medicare. If you do not sign up when you are first eligible - three months before the month you turn age 65 until three months after you turn age 65, you will have to wait for the next open enrolment period which runs from November 15 to December 31 in any given year. It is advisable to purchase your Part D prescription coverage as soon as you are eligible, because penalties may apply if you wait. Even if you are an early retiree and not taking any kind of medication, statistics show that as we age, we will most likely require more drugs, and if you wait to sign up for Part D then you will pay more.

Whether you choose to get your Part D prescription drug plan as a prescription only add-on to original Medicare, or as part of a Medicare Advantage Plan, Medicare Part D drug coverage will help you by covering brand-name and generic drugs at your local pharmacy.

Private insurance companies sell Medicare Part D plans and like all health insurance there will be a monthly premium for your Part D coverage, which will vary by the type of plan and yearly deductible you choose.

Depending on the type of plan you choose, with Part D insurance you will also pay some of the costs of your prescriptions.

There is a "Gap" in Part D coverage, what has been called the infamous  "donut hole". Part D will pay for your prescriptions per your particular plan up to a total amount of $2830.00 annually. Once you reach that amount, you will then have to pay for you medications yourself until you reach $4550.00 for the year, then the insurance will kick back in and pay 95% of your prescription drug costs . If you know you have high prescription drug costs you may want to look for a PDP that offers additional coverage during the "donut hole".

As part of the passage of the Healthcare reform Act the "donut hole" will eventually be closed over the next 10 years. Immediately in 2011 seniors who reach the donut threshold will receive a rebate of  $250.00. In 2012 drug companies will have to offer all Medicare recipients a 50% discount on all prescription medications, further measures will be taken up until 2020, when the hole will be closed entirely.

If you have limited income and resources, you may qualify for additional help to pay for your prescription drug coverage. In some qualifying circumstances your premium or deductible may be eliminated entirely.

To see if you qualify for Part D subsidies you can call Social Security at 1-800-772-1213 or by visiting www.socialsecurity.gov.