Medicare Part D

Medicare Part D, also called the Medicare prescription drug benefit, is an optional United States federal-government program to help Medicare beneficiaries pay for self-administered prescription drugs through prescription drug insurance premiums (the cost of almost all professionally administered prescriptions is covered under optional Part B of United States Medicare). Part D was originally proposed by President Bill Clinton in 1999, then by both political parties and Houses of Congress and President Bush during 2002 and 2003. The final bill was enacted as part of the Medicare Modernization Act of 2003 (which also made changes to the public Part C Medicare health plan program) and went into effect on January 1, 2006. The various proposals were substantially alike in that Part D was optional, it was separated from the other three Parts of Medicare in most proposals, and it used private pharmacy benefit managers on a regional basis to negotiate drug prices. The differences included one-size-fits-all benefits nationwide in the Clinton/Democrat proposals (as opposed to multiple choices in the Republican plans and the bill finally enacted) and a wide array of deductibles and co-pays (including the infamous 'donut hole'); only Bush's initial plan included true catastrophic coverage for middle income seniors, but it was not included and is a feature still not available in Part D. Although generic versions of drugs are now available, plans offered by three of the five insurers currently exclude some or all of these drugs from their formularies. ... Further, prices for the generic versions are not substantially lower than their brand-name equivalents. The lowest price for simvastatin (generic Zocor) 20 mg is 706 percent more expensive than the VA price for brand-name Zocor. The lowest price for sertraline HCl (generic Zoloft) is 47 percent more expensive than the VA price for brand-name Zoloft.' Medicare Part D, also called the Medicare prescription drug benefit, is an optional United States federal-government program to help Medicare beneficiaries pay for self-administered prescription drugs through prescription drug insurance premiums (the cost of almost all professionally administered prescriptions is covered under optional Part B of United States Medicare). Part D was originally proposed by President Bill Clinton in 1999, then by both political parties and Houses of Congress and President Bush during 2002 and 2003. The final bill was enacted as part of the Medicare Modernization Act of 2003 (which also made changes to the public Part C Medicare health plan program) and went into effect on January 1, 2006. The various proposals were substantially alike in that Part D was optional, it was separated from the other three Parts of Medicare in most proposals, and it used private pharmacy benefit managers on a regional basis to negotiate drug prices. The differences included one-size-fits-all benefits nationwide in the Clinton/Democrat proposals (as opposed to multiple choices in the Republican plans and the bill finally enacted) and a wide array of deductibles and co-pays (including the infamous 'donut hole'); only Bush's initial plan included true catastrophic coverage for middle income seniors, but it was not included and is a feature still not available in Part D. Individuals on Medicare are eligible for prescription drug coverage under a Part D plan if they are signed up for benefits under Medicare Part A and/or Part B. Beneficiaries obtain the Part D drug benefit through two types of plans administered by private insurance companies or other types of sponsors: the beneficiaries can join a standalone Prescription Drug Plan (PDP) for drug coverage only or they can join a public Part C health plan that jointly covers all hospital and medical services covered by Medicare Part A and Part B at a minimum, and typically covers additional healthcare costs not covered by Medicare Parts A and B including prescription drugs (MA-PD). (NOTE: Medicare beneficiaries need to be signed up for both Parts A and B to select Part C whereas they need only A or B to select Part D.) About two-thirds of all Medicare beneficiaries are enrolled directly in Part D or get Part-D-like benefits through a public Part C Medicare health plan. Another large group of Medicare beneficiaries get prescription drug coverage under plans offered by former employers or through the Veterans Administration. It is also possible that a former employer or union might sponsor a Part D plan for former employees/members (such plans are called Employer Group Waiver Plans). Medicare beneficiaries can enroll directly through the plan's sponsor, or indirectly via an insurance broker or the exchange—called Medicare Plan Finder—run by the Centers for Medicare and Medicaid Services (CMS) for this purpose; the beneficiary's benefits and any additional assistance payments and rights are the same regardless of enrollment channel. Beneficiaries already on a plan can choose a different plan or drop Part C/D during the annual enrollment period or during other times during the year under special circumstances. For some time, the annual enrollment period has lasted from October 15 to December 7 of each year but that is changing for Part C in 2019. In particular, low-income seniors on Social Security Extra Help/LIS and many middle-income seniors on state pharmaceutical assistance programs can choose a different plan or drop Part C/D more often than once a year. Medicare beneficiaries who were eligible for but did not enroll in a Part D when they were first eligible and later want to enroll, pay a late-enrollment penalty, basically a premium surtax, if they did not have acceptable coverage through another source such as an employer or the U.S. Veterans Administration. This penalty is equal to 1% of the national premium index times the number of full calendar months that they were eligible for but not enrolled in Part D and did not have creditable coverage through another source. The penalty raises the premium of Part D for beneficiaries, when and if they elect coverage.