Medicare Part D Basics

Understanding the Medicare Part D basics will help you make an informed decision about your prescription drug coverage. If you are eligible for Medicare Parts A and B, you are eligible for Part D, a federally subsidized program that assists adults age 65 and older and other individuals who qualify for Medicare with the cost of their prescriptions. After taking a moment to review the basics of this form of financial support, you may decide that Part D would be a valuable addition to your health coverage.

Most seniors want to lead active lives after they retire. Many retirees dream of traveling, spending time with grandchildren or devoting time to volunteer work. No retiree wants to spend more money than necessary on prescription drugs, but many seniors end up paying out of pocket for medications they need to stay healthy. Learning the Medicare Part D basics will show you an alternative to paying outrageously high prices for prescription drugs.

Basics of Federal Benefits

Learning about Medicare Part D and knowing the basics of federally subsidized health services for seniors requires a review of the basics of Medicare. Medicare has multiple parts, which address different needs in the senior population. Part A is hospital insurance. Many inpatient services and accommodations are covered under A. As a tax payer, you have paid for a portion of your hospital benefits through your tax contributions.

B covers doctor visits, outpatient procedures, diagnostic tests, home health care and some preventive services, as long as they are considered medically necessary. To receive these outpatient benefits, most seniors must pay a monthly premium.

Part C, also known as a Medicare Advantage Plan, is offered through private insurance companies that are approved by the federal government. An Advantage Plan combines your hospital and outpatient benefits in a single policy. Advantage plans may also include other types of insurance, such as vision or dental coverage. The basics of these plans vary from one insurance provider to another. Some plans offer only federally subsidized benefits, while others extend your protection to include a wider range of services. Most plans require a monthly premium.

Medicare D assists seniors with the cost of prescription medications that are not covered under A or B. You can receive D benefits through a prescription drug plan, or PDP, which adds drug coverage to the basics of your federal coverage. You can also receive D benefits as part of an Advantage plan. Understanding the Medicare Part D basics will help you decide whether a PDP or Advantage plan is best for you.

Every tax payer becomes eligible for the program at age 65. Individuals with physical disabilities or end stage kidney disease may also qualify. To receive D benefits without paying a late enrollment penalty, you must apply for the program during the government's open enrollment period. For seniors, this period occurs during the 3 months before and after your 65th birthday. There are special enrollment periods for adults who move out of their service area, live in a nursing home or need extra financial assistance.

Prescription Drug Coverage and Exclusions

As you cover the Medicare Part D basics, you'll learn about the medications that are covered and excluded under your plan. Each PDP or Advantage program may cover different medications, which are listed in a document called a formulary. As part of learning the Medicare Part D basics of any plan, review the formulary to make sure that the medications you need are listed. Many plans also require that you fill your prescriptions at pharmacies in the plan's network. A list of network pharmacies should be included in the Medicare Part D basics provided by the insurer.

Many insurers separate the drugs covered under the Medicare Part D basics into different tiers. Each tier usually represents a different level of cost. Drugs in lower tiers usually cost less than drugs in higher tiers. All medications must be prescribed by your doctor and authorized by your insurance provider in order to be covered. Vitamins, over-the-counter remedies, medications used for cosmetic purposes and certain other categories of drugs are excluded under the Medicare Part D basics.

If you need extra help covering the cost of your prescriptions, you may receive additional benefits through Social Security. Extra financial help is available to seniors who meet the government's income requirements. If you receive extra help, you may be exempt from late enrollment penalties when you apply for a PDP or Advantage plan.

Once you've reviewed the Medicare Part D basics, you'll be better equipped to choose the PDP or Advantage program that fits your needs. Because benefits and costs of these plans vary from one insurer to another, it pays to compare quotes from several providers before you commit to one policy. With the right plan, you can receive the health care you deserve at affordable premiums.

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