Medicare Part D – The Medicare Reform Bill of 2005 established a Medicare Prescription Drug Program. The 43 million seniors then eligible for the program began receiving information in October 1, 2005. Insurance carriers began offering thousand of Prescription Drug Plans, PDPs. Sign-ups began November 15th and coverage began January 1, 2006. On average, seniors through out the country will pay a $32 monthly premium – with Californians paying on average a $25 monthly premium – for most of the drugs they need.
Prescription Drug Plans (PDPs) have two main variations – stand-alone PDPs and Medicare health plans that include PDPs. Most Medicare Advantage plans, whether PPO, HMO, or PFFS plans have built-in PDP coverage (MA-PDs), or have PDP coverage as an option you can select. To enroll in a PDP, you must either be either eligible for Part A, or enrolled in Part B. Part D is a voluntary program, you are not required to enroll in a PDP. However, there is a cumulative 1% per month premium penalty you must pay to enroll in a PDP plan after the date you first became eligible. It is best to enroll in a PDP plan, or a Medicare Advantage plan with drug coverage when you first become eligible. If you have an existing Medicare supplement policy with prescription drug coverage, contact your agent for advice about switching.
There is a lot of confusion about eligiblity requirements and about specific coverages and out of pocket costs. The programs normally operate like this:
If you earn more than $85,000 MAGI as an individual or more than $170,000 MAGI as a couple filing jointly, your Part D premiums will cost from $12.00 to $69.10 per month more.