What are the basic details of the 2021 Medicare Part D Program?
In general, Medicare Part D prescription drug plans provide insurance coverage for your prescription drugs - just like other types of insurance. Your Medicare prescription drug coverage can be provided by a "stand-alone" Medicare Part D plan (only prescription coverage) or a Medicare Advantage plan that includes prescription coverage (or an MA-PD that includes Medicare health and prescription drug coverage). If you join a Medicare Part D prescription drug plan, you will pay a monthly premium ranging from only a few dollars up to over 100 dollars. If you join a Medicare Advantage plan, you may have a $0 premium. Your monthly premiums will vary depending on the benefits of your selected Medicare Part D plan or Medicare Advantage plan and your resident state.
Some Medicare Part D or Medicare Advantage plans have an initial deductible where you pay 100% of your prescription costs before your Part D prescription drug coverage or benefits begin. Other Medicare Part D or Medicare Advantage plans have no initial deductible or a $0 deductible, providing you with coverage as soon as you purchase your first prescriptions. Please note, that you may pay a higher monthly premium for Medicare Part D plans with no initial deductible. Also, the amount of the initial deductible can (and probably will) change each coverage year.
Each Medicare prescription drug plan will have a list of prescription drugs or formulary that are covered by the plan. Drug lists or formularies can vary greatly from one prescription drug plan to the next. So it is key that you ensure that your medications are covered by your chosen Medicare prescription drug plan.
When you use your Medicare Part D plan after the initial deductible (if applicable), you will pay a certain part of your prescription costs and your Medicare prescription drug plan will pay a part of your drug costs. Your plan's cost-sharing (co-payments or co-insurance) will vary depending on the particular drug plan you choose.
The Centers for Medicare and Medicaid Services (CMS) notes:
Medicare prescription drug coverage (Part D) helps you pay for both brand-name and generic drugs. Medicare drug plans are offered by insurance companies and other private companies approved by Medicare. You can get coverage 2 ways:
1. Medicare Prescription Drug Plans (sometimes called “PDPs”) add prescription drug coverage to Original Medicare, some Medicare Private Fee-for-Service (PFFS) Plans, some Medicare Cost Plans, and Medicare Medical Savings Account (MSA) Plans.
2. Some Medicare Advantage Plans (like HMOs or PPOs) or other Medicare health plans offer prescription drug coverage. You generally get all of your Medicare Part A (Hospital Insurance), Medicare Part B (Medical Insurance), and Part D through these plans. Medicare Advantage Plans that offer prescription drug coverage are sometimes called “MA-PDs.”
CMS uses the term “Medicare drug plans” to mean all plans that provide Medicare prescription drug coverage.
Which governmental agency is responsible for the Medicare Part D program?
The Centers for Medicare and Medicaid Services (CMS) or Medicare is responsible for the administration of the Medicare Part D prescription drug program. Private insurance carriers actually implement the various Medicare Part D plans across the country under the direction of CMS.
How many Medicare Part D plans are currently available?
There are approximately 40 to 50 Medicare Part D prescription drug plans (or PDPs) available in each state or CMS region.
Estimates suggest that in 2021 there are 1,439 Stand Alone Medicare Part D prescription drug plans (or PDPs) across the entire county.
Of these plans, there are 19 companies offering plans on a national level.
Where did the Medicare Part D prescription drug program come from?
Medicare Part D plans have their origin in the Medicare Prescription Drug, Improvement, and Modernization Act which was passed on December 8, 2003. This law established a voluntary drug benefit for Medicare beneficiaries and created the new Medicare Part D program. In short, the Medicare Modernization Act and the Medicare Prescription Drug Improvement feature gives Medicare beneficiaries, that is seniors and disabled citizens eligible for Medicare access to drug coverage beginning in January of 2006.