A Brief Overview of Medicare
Medicare is the federal health care insurance program primarily for those of retirement age. The program was signed into law in 1965 and today covers over 60 million Americans. Medicare is divided into four parts—Part A, Part B, Part C, and Part D. In this article we will cover information about Medicare Part D.
What is Medicare Part D?
Medicare Part D, also known as Medicare prescription drug coverage, is an optional program to help you cover the cost of prescription drugs. The Medicare prescription drug plan (PDP) was officially enacted in 2003 under the Medicare Modernization Act and went into effect on January 1, 2006. Under this act, Medicare Part D provided prescription drug coverage through private companies to Medicare beneficiaries.
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What Does Medicare Part D Coverage Entail?
There are a variety of plans to choose from under Medicare D. Each plan offering has their own list of covered drugs. This list of drugs is called a formulary. A formulary includes both brand-name prescription drugs and generic drugs. All plans must cover at least two drugs per drug category.
Using the drugs listed on the plan will save you money because the insurance coverage provider negotiated a lower price. If you choose a drug not listed on your plan you will have to pay full price for the drug instead of a copayment or coinsurance. Generally if your specific drug is not listed on the plan, there will be a comparable alternative available through your coverage. You can also apply for a formulary exception to have your drug approved through your insurance provider.
Each plan’s formulary will list drugs under different tiers. The higher the tier, the more expensive the drug will be to you. A breakdown of Medicare Part D’s cost structure is listed below under copay tiers.
Source: Medicare Part D | All You Need to Know About its Coverage
