Medicare Part D

Medicare Part D is a prescription drug insurance program that is available to people over the age of 65 or those who suffer from specific disabilities.

Prior to January 1, 2006, individuals who depended on Medicare as their sole means of health insurance were left without any prescription coverage, and in an age when a single prescription could cost you hundreds each month, they were left choosing between paying for housing and food or paying for much needed medication. In an effort to alleviate this problem the Health Care Financing Administration (HCFA) created Medicare Part D. While HCFA oversees the program, private health insurance companies administer the plan. In fact, depending on where you live, you will have several company plans to choose from.

While Medicare Part D does not cover all of your medication needs or costs, it does alleviate much of the financial burden when dealing with what has been termed catastrophic medical needs. Catastrophic costs pertain to individuals who spend more than $2,850 for medication annually.

Part D does not cover any medications that are covered by Medicare Part A and B. Additionally, the following drugs are excluded from coverage:

• Over-the-counter drugs, vitamins, or minerals
• Prescription vitamins and minerals
• Fertility drugs
• Drugs promoting weight loss or gain
• Barbiturates and Benzodiazepines
• Drugs used for cosmetic purposes or to relieve common colds and coughs
• Inpatient medications

While each private insurance company handles the administration of the Medicare Part D plan a bit differently, on average, you can expect to pay premiums that average less than $500 annually, and these premiums can often be paid on a monthly basis. You will also be asked to pay a deductible and co-insurance. A deductible is an out-of-pocket amount that you have to pay to the pharmacy before the insurance policy kicks in. Co-insurance is the difference between the prescription cost and insurance payment and is the responsibility of the insured.

On average you can expect plans to pay according to the following schedule:

While you may not have a lot of pharmaceutical expenses right now, keep in mind that if you do not enroll for Part D when you qualify, it will cost you one percent more in premium payments for each month that you delay. That means if you wait two years to apply, your premium payments will be 24 percent higher than if you applied when you first qualified for the Medicare program.

If you are single and earn less than $14,355 a year and your assets equal less than $11,500, you may qualify for discounted premiums, deductibles, and co-insurance. Couples who earn less than $19,235 and whose assets are less than $23,000 may also qualify.

Before you sign up for a Medicare Part D plan, make sure to review all of your options. HCFA guidelines only allow you to change plans once a year, during the annual open enrollment period. Look at each plan offered for your area, and if you have questions, consult with the private insurance company agents or refer to the following informational contact details:

• 1-800-MEDICARE
• Medicare website
• Local counseling referrals

You may also want to check with your local pharmacy about Medicare prescriptions. Many chains such as Osco and Walgreens offer free Medicare information and/or consultations.

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