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About 27 million Americans will receive a substantial price break on prescription drug costs through Medicare Part D coverage – either through a prescription drug plan (PDP) or a Medicare Advantage prescription drug plan (MAPD).
For those enrolled in Original Medicare, the only source of PDPs is through private insurance companies. Since it is illegal for private insurers to pitch Medicare enrollees on specific PDPs, the enrollee must do the homework necessary to locate the most appropriate PDP.
The first opportunity for enrollment is when you're initially eligible for Medicare – during the seven-month period beginning three months before your 65th birthday. If you enrolled in Medicare due to a disability, you may enroll during a six-month window beginning three months prior to your 25th month of disability.
In most cases, your enrollment is limited to an annual enrollment period between November 15 and December 31, with coverage starting January 1 of the following year.
After you've chosen from the various PDP offerings, you can enroll by:
Note: You can switch to a new prescription drug plan during the above-mentioned window of time without canceling your old drug plan. The new one automatically supercedes the old one.
Once you apply for Plan D, it generally takes five weeks for your membership card to arrival. During that time, if you need prescription medications, most pharmacies will accept the initial letter you received from Medicare acknowledging your upcoming membership, or an enrollment confirmation number.
Your out-of-pocket costs will depend on the plan you choose, based on your individual medical needs. Be sure to look beyond the plan premium and consider all costs.
The typical prescription drug plan charges a monthly fee on top of the Part B premium. The fee varies, depending on what plan you enroll in. There are four ways to pay fees:
Also called "traditional" Medicare, it's the fee-for-service program in which the government pays your health care costs. The coverage includes Medicare Part A and Medicare Part B and allows you to see any doctor anywhere (who accepts Medicare patients).
Medicare Part A helps cover inpatient hospital visit expenses, including a semi-private room, medical tests and doctors' fees. It may pay a portion of skilled nursing expenses and home health services, if ordered by a physician, and often 100 percent of hospice care.
Medicare Advantage plans replace your government coverage with private insurance. These plans cost more but offer more benefits than traditional medicare.
Medicare Part D is prescription drug coverage available only through private companies, but any individual who receives Medicare health insurance is eligible. Part D covers both brand name and generic drugs with a short list of exceptions.
Medigap plans offer supplemental benefits sold by private companies to extend traditional medicare. Fourteen plans offer varying combinations of benefits, covering copayments and deductibles and foreign travel emergency expenses, at-home care and preventive care.
One provision of the Patient Protection and Affordable Care Act is focused on phasing out the Medicare Part D donut hole.
The term refers to the coverage gap in the prescription drug benefit – the point where prescription expenses exceed the initial coverage limit of an enrollee's plan, but have not yet reached the catastrophic coverage level. Until they've exited this "donut hole," patients pay 100 percent of their prescription drug expenses.
In 2010, the reform legislation began providing some relief for those who reach the "donut hole" by sending a tax-free $250 rebate to enrollees when they reach the coverage gap. Beginning in 2011, the law provides a 50 percent discount on brand-name drugs for those Medicare Part D enrollees reaching the donut hole.