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Medicare Rx Benefits

Medicare's Rx benefit is known as Medicare Part D. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 enacted Part D. Plans were first offered in 2006. Part D is sold through private companies that are approved by Medicare. All Medicare beneficiaries are entitled to Part D, although not all beneficiaries need it. Whether you need Part D depends on the other coverage you have.

  1. Stand-Alone Plans

    • If you have original Medicare alone, or original Medicare with a Medicare Supplement, or Medigap, plan, you should consider a stand-alone Part D plan. Many companies offer these plans, and most companies offer multiple options to choose from. Each company uses it's own formulary, or drug list, so it's important to check with each company to ensure the medications you take are covered. Stand-alone plans have a monthly premium, co-pays and possibly deductibles.

    Medicare Advantage Plans

    • Some plans combine medical coverage with Part D prescription benefits. These plans are called Medicare Advantage Plans. They can be health maintenance organizations (HMOs), preferred provider organizations (PPOs) or private fee-for-service plans (PFFS). These plans have a monthly premium, which is in addition to Medicare Part B. You must have Medicare Part A and Part B to enroll in a Medicare Advantage plan.

    Other Creditable Coverage

    • You may not need Medicare Part D if you have other creditable coverage. This coverage includes health insurance obtained from a former employer or through a spouse, Veteran's Administration coverage, or COBRA. If you involuntarily lose your prescription coverage, you receive a special enrollment period, and you're not penalized. If you delay enrolling into a Part D plan and you don't have other coverage, you will be penalized by having to pay additional premiums.

    Choosing a Plan

    • Your state department of insurance can provide you with a list of companies approved to sell Part D plans and Medicare Advantage plans in your state. There are also tools on the Medicare website (see Resources) that you can use to search for a plan. If you are on a limited income, you can apply for extra help with your prescription costs.

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