Analysis of Medicare Part D

Medicare Part D was passed as an act of Congress in 2003 as the Medicare Prescription Drug, Improvement and Modernization Act. It officially went into effect on Jan. 1, 2006. While the program offers prescription drug coverage for beneficiaries, it has been the subject of much criticism.

Function

• Medicare Part D offers beneficiaries of the program the chance to join a Prescription Drug Plan (PDP). If a person signs up for a Medicare Advantage (MA) program, he or she will be removed from the PDP program, unless they choose to withdraw from MA.

Geography

• The amount of Medicare Part D options available to individuals varies from state to state. As of 2008, a total of 1,824 different plans were available across the country, each of which could be chosen depending individual needs.

Features

• Those enrolled in Medicare Part D are required to pay a $275 deductible each year. The program then covers $2,510 worth of medications. However, if a person purchases more than $4,050 annually, the program reduces the cost to roughly five percent of the price of the drugs.

Considerations

• Unlike other government-sponsored insurance programs, such as the Veterans Administration coverage, Medicare Part D does not allow the government to negotiate drug costs. This means that the program pays more than other health coverage programs.

Time Frame

• In order to be enrolled in Medicare Part D, one must first qualify for Medicare benefits. Enrollment occurs by Nov. 15 prior to the plan year, and officially goes into effect on Jan. 1.