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Explanation of Medicaid Part D

Medicare Part D is an insurance policy for prescription drugs. It was developed to assist seniors on Medicare by lowering the cost of their prescription drugs. Provided by private insurance companies, Medicare Part D insurance can be purchased at the time you become eligible for Medicare.

  1. Eligibility

    • If you are on Medicare, either Part A or B, you can sign up for Part D drug coverage no matter what prescription drugs you currently use or the state of your health. If you are currently on Medicaid, and receive your drugs through that program, then you must sign up for a Part D plan when you become eligible to move from Medicaid to Medicare.

    Extra Help

    • Extra Help is part of the Medicare drug insurance program that provides aide to people that have limited income. There is no cost for Part D insurance if you meet certain requirements such as being on Medicaid or receiving Supplemental Security Income, and you will have lower co-pays. Levels of assistance are available until, as of 2011, your income is higher than $1,353.75 a month for a single person or $1,821.25 a month, if married, with no more than $12,510 in assets for a single person or $25,010 for married couples.

    Doughnut Hole

    • This is the term given to a coverage change once you reach a specific level of drug costs. For 2011, you may be required to pay a $310 deductible. After your deductible, if any, you then pay a co-payment and the Part D insurance pays the balance. When the total amount paid for your prescriptions reaches $2,840, you will have to pay 50 percent of your drug costs until your total out-of-pocket reaches $4,550. After that, your insurance plan will pay 95 percent of prescription drug costs for the remainder of the year.

    Late Enrollment Penalty

    • There is a penalty for enrolling late in a Part D plan, defined as not enrolling when you first become eligible or going more than 63 days with no coverage as good as Part D coverage. The penalty is a percentage of the national average Part D premium and is multiplied by the number of months you are without coverage. This penalty will be charged to you as long as you maintain Medicare Part D coverage. As the national average rises, your penalty will also rise.

    Purchasing Part D

    • Part D insurance can be added to your Medicare plan. It is also possible to purchase the insurance through private plans. For either option there will probably be a monthly premium. If you belong to an HMO or to a PPO or have a Medicare Advantage Plan, it is possible the Part D coverage is already included in the premium you pay, and you should consult your plan description.

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