Understanding the New Medicare Prescription Drug Plan

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This article explains the basics about the Medicare drug benefit, also called Medicare Part D.

Medicare has added coverage for prescription medicines. This means that people who have Medicare are able to get insurance to pay for part of their prescription drugs. Medicare is working with insurance companies to offer this benefit. It is available no matter what your income, illnesses, or drug costs.

You can sign up or change your plan between November 15 and December 31 each year. Your coverage will begin on January 1 of the new year. You should enroll this year if you are eligible, or you may have to pay more if you decide to join later.

Because private companies are setting up the plans for Medicare, each plan will be a bit different. Some may use only certain pharmacies and others may cover only certain drugs. The cost also may vary. It is important to pick one that meets your needs.

Medicare has information that can help you compare the plans. You can get this info at www.medicare.gov or 1-800-MEDICARE (1-800-633-4226). You should have also received a handbook called "Medicare & You" in the mail.

State Health Insurance Assistance Programs (SHIP) will be a good place to get help. Call 1-800-MEDICARE to get the number for your local SHIP. Local community groups will also be helping people pick the right plans.

Cost will vary depending on which plan you choose, which drugs you use and whether you get help paying your Medicare Part D costs. Most Part D drug plans charge a monthly premium (an average of $27.93), a $275 deductible and a small co-pay for each drug. Some people qualify for extra help paying their costs. If you think you qualify, contact the Social Security Administration to apply.

If you don't qualify for extra help, your drug plan may have a "coverage gap" -- some people call it the "donut hole." A coverage gap is a period of time in which you will have to pay for all your prescription drug costs yourself. The coverage gap begins once you and your plan have spent $2,510 on prescription drugs. After that, you will continue to pay your monthly premium and you will pay for the next $3,216 of your drug costs out-of-pocket. Once you reach your coverage gap limit, you have "catastrophic coverage." This means you only pay a small amount for each of your drugs for the rest of the year.

If you get drug coverage through Medigap, you will get information from your insurance company. This information will help you decide what to do.

You will get information from your employer or union that tells you if your current plan covers less, the same, or more than Medicare drug insurance will cover.

If your current plan covers less than Medicare, you can:

If your current plan covers the same as or more than Medicare, you can:

If you're looking for more information about Medicare Part D, familydoctor.org has compiled a list of additional resources that may be helpful.

Are you a physician looking for materials for your patients?
Please visit http://www.aafp.org/online/en/home/policy/medicare.html.