By: Silvia Montana
Medicare Part D is a new drug benefit designed to help seniors pay for the cost of their prescription medications. The program is part of the Medicare Prescription Drug Improvement and Modernization Act of 2003.
Q: How do Medicare Parts A, B , C and D differ?
A: See below for details on the 4 parts of medicare.
Medicare Part A: Covers institutional services - most Medicare eligibles are automatically enrolled.
Medicare Part B: Covers professional services - requires enrollment and premium; beneficiary portion is typically deducted from the Social Security check.
Medicare Part C: Full replacement product (Medicare Advantage) for Medicare Part A and Medicare Part B - government pays private health plans what it estimates it would have paid for Parts A and B; beneficiary must enroll in Part B; any additional premium for Part C is collected by the Part C plan.
Medicare Part D: The new drug benefit designed to help seniors pay for the cost of their prescription medications. With Part D, Medicare shares the cost of the prescription drug benefit with the retiree.
Q: How will the Part D program work?
A: Medicare will offer the Part D benefit by contracting with private companies, also referred to as Prescription Drug Plan Sponsors (PDPs) or Medicare Advantage Drug Plan Sponsors (MA-PDs). Medicare beneficiaries will have the opportunity to purchase the Part D benefit from a PDP in their area. This is similar to the process that Medicare used to offer the Medicare-approved drug discount card program.
Q: What are Medicare Part D’s key advantages?
A: The Medicare Part D benefit is expected to reflect the following:
1. Access to a wide pharmacy network, including national chains as well as independent pharmacies
2. Competitive discounts
3. Point-of-sale drug claim processing
4. Mail service
5. Medical therapy management programs
Q: Who is eligible for the Part D drug benefit?
A: All individuals entitled to Medicare Part A or enrolled in Part B will qualify for Part D coverage.
Q: Will late penalties apply if customers do not immediately enroll in Medicare Part D?
A: A late penalty will apply when Medicare-eligible individuals without creditable coverage do not enroll in Part D during their initial enrollment period. This penalty was designed to encourage beneficiaries to sign up for Part D drug coverage at the youngest possible age, keep overall program costs more affordable and to remain consistent with the penalty used for delayed enrollment into Medicare Part B.
Q: Is enrollment in Medicare Part D mandatory?
A: In general, Medicare Part D is a voluntary prescription drug benefit and will not automatically be added to a customer’s Medicare benefits. However, individuals eligible for both Medicaid and Medicare will be automatically enrolled.
