How Is Medicare Part D Beneficial to Older Adults?

Medicare Part D helps seniors pay for the cost of prescription drugs. It is available to all Americans who have Medicare Parts A or B. Since the program's introduction in 2006, Medicare Part D has reduced the cost of prescription drugs for seniors by more than 13 percent, according to the Agency for Healthcare Research and Quality.

Medicare Part D

• Medicare Part D helps seniors pay for their prescriptions. While a monthly premium is required for the coverage, the combined cost of the premium and the co-payments is still significantly less than the full out-of-pocket cost. To get Medicare Part D, you must enroll in a plan offered by a private insurance company; you have to be enrolled in Medicare Part A and Part B before you can choose one of the drug plans.

History

• Medicare Part D was one of the upgrades included in the Medicare Prescription Drug, Improvement and Modernization Act of 2003. Prior to this act, Medicare beneficiaries were largely responsible for their own prescription drug costs. Low-income seniors can also apply for extra help with their prescription drugs through state programs that pay Part D premiums, and possibly co-payments. Income requirements vary according to state.

Cost

• The cost for Medicare Part D drug plans varies according to the insurer and the plan you choose. Some drug plans have an annual deductible, while other plans that do not have a deductible spread out the costs over the course of the year. As of 2011, the maximum annual deductible is $310. Every prescription drug plan is different in terms of how it classifies and charges co-payments for drugs, so a drug may cost more on one plan that it does on another. Most Medicare Advantage plans include prescription drug coverage, so purchasing an additional Part D plan is unnecessary.

Enrollment

• In general, Medicare beneficiaries must enroll in a Medicare Part D plan within 90 days of their 65th birthday, unless they have prescription drug coverage through their employer or other health insurance policy. Enrollment in Part D is not mandatory, but if you don't enroll when you are first eligible, you'll have to pay a penalty on your premium, which can increase your costs significantly. Medicare recommends that all Medicare beneficiaries enroll in a Part D plan as soon as they are eligible, even if they do not currently take any prescription drugs, to provide the peace of mind that comes with knowing their prescriptions will be covered if they need them.