Medicare Part D (Prescription Drug Coverage)
Part D helps pay for the prescription drugs you use. Whether you buy Part D coverage is up to you. Prescription drug coverage is an insurance policy you buy from private companies. You can buy a separate policy just for drugs, called a prescription drug plan (PDP). Or you can buy some types of Medicare Advantage plans that include drug coverage. The federal government has created guidelines for which drugs must be offered by drug plans and set minimum standards of benefits. Insurance companies that offer Part D plans must meet these standards.
What pharmacies may I use?
Each drug plan decides which pharmacies plan members may use. Some pharmacy networks are very limited and some are very broad. Some plans allow you to use only pharmacies locally while some plans have a national network of pharmacies. Some plans also offer mail order services, so you can have drugs mailed to your home.
Part D coverage involves significant cost sharing until you have spent $4,550 (2010) out of your pocket in a single year. At that point, you are eligible for what Part D called “catastrophic coverage.” You pay only a small co-insurance or co-payment for a covered drug, and your plan pays the rest for the remainder of the year. Drug plans generally offer coverage in a specific geographic area, like a state. Some do offer nationwide coverage. You may not be covered, or you may have to pay more, if you use pharmacies outside the plan’s geographic area.
What won’t I get help with?
Part D plans vary in which specific drugs they cover. The federal government excludes a few types of drugs from drug plan coverage. In most plans, there is also a stage of cost sharing called the “coverage gap” or “doughnut hole,” in which you must pay all of your own costs.