Medicare Part D is an optional prescription drug benefit program under Medicare that helps Medicare beneficiaries pay for self-administered prescription drugs. It was established by the Medicare Modernization Act of 2003 and became effective on January 1, 2006. Part D plans are offered through private insurance companies approved by Medicare, and enrollees pay premiums and cost-sharing amounts depending on their plan and income level.
Key Features of Medicare Part D:
- Covers outpatient prescription drugs including brand-name and generic drugs.
- Beneficiaries can get coverage either through a standalone prescription drug plan or a Medicare Advantage plan that includes drug coverage.
- Plans have a "standard benefit" structure with phases including an annual deductible, an initial coverage phase, a coverage gap ("donut hole" which is now largely closed for beneficiaries), and a catastrophic coverage phase.
- Costs to beneficiaries include monthly premiums, deductibles, co-payments, and co-insurance, with financial help available for low-income individuals under the Extra Help program.
- Part D covers drugs that are FDA-approved, medically necessary, and on the plan's formulary.
- Plans revise formularies yearly, requiring beneficiaries to review their coverage annually.
- Beginning in 2024, insulin costs under Part D have limits on deductibles and co-pays.
Enrollment and Eligibility:
- Must be enrolled in Medicare Part A or Part B to qualify.
- Enrollment can be done directly through a plan or intermediaries, with penalties for late enrollment.
- Nearly three-quarters of Medicare beneficiaries participate in Part D.
Overall, Medicare Part D plays a significant role in financing prescription drug costs for Medicare enrollees through a mix of private plan offerings and government subsidies, aiming to improve access to necessary medications while managing out-of-pocket expenses.
