Medicare Part D

Medicare part D is the insurance companies drug benefit plan. This is the section the entails outpatient drug prescriptions. If you want drug coverage you would have to enroll in the private Medicare prescription drug plan. Although the enrollment is optional, it is only permitted during the designated enrollment dates. Ideally you would want to sign up for part D at the time of your enrollment in Medicare. Whether you need the coverage or not depends on your circumstances. Read on to find out if you qualify.

How Medicare Came to Be

Bill Clinton was the man who originally pitched the idea for Medicare part D. This was back in the year 2000. His proposal was based off of congress woman, Nancy Pelosi and Senator Tom Daschle. These pitches that came in the 90's are similar to today's current plan, other than the spend phase structure, but Medicare itself would not do the negotiating.

It got started officially in 2006, with the expectation that eleven million people would be covered. By 2007 over double that expected number was covered by Medicare part D, twenty-four million. More than half of the enrollees were satisfied with their coverage.

Different Medicare Plans

There are two different plans within the coverage.
  • The Standalone plan (PDP) and the Medicare Advantage plan (MA-PD). The PDP plan will offer drug coverage and drug coverage alone. This plan is intended for individuals who would like to keep their other health benefits on the traditional fee-for-service program.

  • The MA-PD plan is a little different. This plan will cover both medical services as well as prescription drugs. This is for individuals who would like to have all their benefits on one package. Usually through a preferred provider organization (PPO) or a health maintenance organization (HMO).

What Costs to Expect

Will you have a premium? Does your income effect how much you pay? How much will Medicare part D cost? I am sure these are some of the questions you are asking yourself. Don't worry I am here to answer them promptly. To begin with, Medicare Part D has no monthly premium. Each separate drug plan creates its own premium for each year. Some MA-PD plans will not charge you an extra premium.

Next, your income could probably affect how much you pay for Medicare part D. If your latest tax return is $85,000 and you claim single, $170,000 for married couples, you will need to pay a surcharge. If you meet the requirements for the surcharge you are required to pay it directly to Medicare while still paying your regular premium. In the event of your income dropping, you are eligible to have your surcharge reduced, or even removed.

Finally, we are at the big question. How much will Medicare part D cost? Well, by the end of 2008 the average annual payment for beneficiary was at $1,517. This number can range from people of different classes. Lower income families will be paying way more affordable prices than the top tier of money makers. For people who are terminally ill and have high drug cost, they could spend up to $6,000 per year out of pocket.