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.

What is the Medicare Prescription Drug Plan?

The Medicare Prescription Drug Plan (Medicare Part D) covers prescription medicines. This means that people who have Medicare are able to get insurance to pay for part of their prescription drugs. Medicare works with insurance companies to offer this benefit. It is available no matter what your income, illnesses, or drug costs.

When can I sign up?

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.

How do the Medicare drug plans differ?

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.

How do I choose a plan?

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.

Where else can I get help?

State Health Insurance Assistance Programs (SHIP) will be a good place to get help. Call 1-800-MEDICARE (1-800-633-4226) to get the number for your local SHIP. Local community groups will also be helping people pick the right plans.

How much does this insurance cost?

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.

How will the new health care law affect Medicare Part D?

The new health care law signed by President Barack Obama will benefit Medicare patients who will hit the coverage gap (“donut hole”) under the prescription drug benefit this year. The coverage gap is a period of time in which you have to pay for all your prescription drug costs yourself. In 2010, the new law establishes that patients who have Medicare Part D will receive a $250 rebate from Medicare in 2010. These checks will begin mailing in June and will continue to be mailed throughout the year as Medicare patients enter the coverage gap.

In 2011, if you are a Medicare patient, you will receive a 50% discount when you buy brand-name prescription drugs covered by Medicare Part D. You will receive additional savings over the next 10 years. The coverage gap will be eliminated by 2020.