What Is Medicare Part D?
The Medicare Part D program provides beneficiaries with assistance paying for prescription drugs. The drug benefit, added to Medicare by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, (MMA), began in January 2006. Unlike coverage in Medicare Parts A and B, Part D coverage is not provided within the traditional Medicare program. Instead, beneficiaries must affirmatively enroll in one of many hundreds of Part D plans offered by private companies. The Annual Enrollment Period for Part D runs from November 15 – December 31.
Anyone who has Medicare Part A (Hospital Insurance) and/or enrolled in Part B (Medicare Insurance) can join a Medicare prescription drug plan. To enroll, a person must live in the service area of the plan. Unlike Medicare Part A and Part B where a person is automatically enrolled, you have to take action. You have to enroll in a plan to get the coverage. Standard Benefit 2008
Beneficiary pays the first $275 (Deductible).
Beneficiary pays 25% of the next $2,235. (25% of $2,235 = $558.75) - Initial Benefit Period Donut Hole "Threshold" = $2,510. That is, what the beneficiary and the plan have spent ($275 + $2,235 = $2,510) Beneficiary pays 100% of the next $3,216.25. (The "Donut Hole") "Catastrophic Coverage" begins after the beneficiary has spent $4,050 (this is the total out-of-pocket spending requirement) ($275 + $558.75 + $3,216.25 = $4,050). Minimum cost sharing in Catastrophic Benefit Period: $2.25 (Generic) and $5.60 (Brand) (Source: “Center for Medicare Advocacy, Inc.”, 2007)
Most Americans agree that affordable drug coverage under Medicare has been needed for some time. But instead of a solution to a growing problem, Congress gave the country a prescription-drug plan that achieves few of its original goals. The current problems with Medicare Part D are largely a direct result of the undemocratic way in which the plan was authored and passed. The final legislation, heavily influenced by drug-company and health insurance lobbyists, focused mainly on the needs of those industries instead of those of the seniors it should serve. (Source: “Slaughter,” 2006)
Seniors enrolled in Medicare Part D plans pay 58 percent more for the most commonly prescribed drugs than Americans who buy their medications through health plans administered by the Department of Veterans Affairs. •
The Medicare Part D benefits offered by private insurers operate with “high administrative costs, sales expenses and profits. (Source: “Silverman,” 2007)
Under the standard Part D program, enrollees pay a $250 deductible, and then 25% of prescription drug costs until annual out-of-pocket costs reach $2,250. Any costs over that figure, up to $5,100, are paid 100% by the Part D enrollee. This gap is known as a "doughnut hole", since you get something on each side, but nothing in the middle. If you require a large number of prescriptions, or a small number of expensive prescriptions, the costs can devastate your finances. (Source: “McWhinney,” 2006)
Problems with the Implementation of Medicare Part D
As widely reported by Medicare beneficiaries, advocates, pharmacies, physicians and the media, there have been myriad problems with the implementation of Part D. Without addressing the issues outlined below, Medicare beneficiaries will continue to face problems navigating Part D and getting the medications they need at the lowest cost.
In addition to the unprecedented volume of demand for their services, the nature and structure of the Part D benefit injects a level of complexity that requires significantly more time, effort and expertise in counseling each consumer. Program managers estimate that most people choosing a plan require several hours of counseling time and often multiple counseling sessions (each of several hours in length) to collect information about their drug usage and research...
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