Medicare Part D

Medicare Part D is Medicare’s prescription drug program that went into effect on January 1, 2006.  Participation in Medicare Part D is voluntary, although most beneficiaries choose to enroll.  Medicare Part D beneficiaries have a choice of either a stand-alone prescription drug plan (PDP) with a separate premium or a Medicare Advantage plan with an attached drug benefit (MA-PDP).  A highly popular program, Part D provides seniors and other Medicare beneficiaries with coverage of a wide range of brand-name and generic prescriptions. Medicare beneficiaries are often obligated to pay co-payments for certain drugs, although some medications (often low-cost generic drugs) may require no co-pay at all.  In addition, beneficiaries with high drug expenses may find themselves temporarily in the Medicare coverage gap (also known as the “donut hole”), although the ACA takes steps to eliminate the gap over the next several years.

Prior to the advent of Medicare Part D, about one in three Medicare beneficiaries lacked prescription drug coverage.  Those beneficiaries had to either go without needed medicines or pay cash prices at pharmacies far in excess of what those individuals with insurance coverage paid.

Medicare Part D is unique in that it is a federal health program whose costs and premiums have come in lower than originally forecast while still maintaining broad choice and access.  Numerous experts have ascribed the program’s success to its market-driven model, plan emphasis on promoting access to more affordable generic medicines, and health plans’ ability to bargain effectively with pharmacies and brand-name drugmakers to drive deep discounts for seniors.