There is very little prescription drug coverage in Original Medicare. In 2003 Medicare Part D (AKA PDP) enacted as part of the Medicare Modernization Act. The purpose of Medicare Part D is to help make medications more affordable for people enrolled in Medicare.
Technically, Medicare Part D is voluntary coverage; you are not required to buy a plan. If you go without a plan a late penalty might be applied to your monthly premium once you enroll. There are a few exceptions; if you have prescription drug coverage through an employer group or retiree plan or the VA, these are consider creditable coverage.
What does a Medicare Part D plan cover?
As private insurance companies sell Part D plans, many benefits and cost-differ from plan to plan. The Center for Medicare and Medicaid Services (CMS) sets minimum coverage guidelines for all Part D plans. The primary rule is all plans are require to cover medications to treat most illnesses and diseases.
Each Medicare Part D plan uses a prescription drug formulary, which is a list of medications covered by the plan and the costs for each. The formulary causes many plans to use a tiered copayment system. The lowest tiers, usually generic medications, have the lower copayments. As brand-name and specialty medications are in the higher tiers costing more out-of-pocket expense.
Medicare Part D only covers prescription drugs that are FDA approved. Experimental medications are generally not covered. Drugs covered by Medicare Part A and B are not included; this includes many injectables and others administrated in a healthcare facility.
How much does a Medicare Part D plan cost?
The plans are sold by private insurance company that’s determines the costs of the plans. The plan premium will have various costs based on the benefits of the plan.