Medicare Part D, is also known as a Prescription Drug Plan or “PDP,” was created under the Medicare Modernization Act of 2003 to assist in covering the costs of prescription drugs. Prescription drug coverage is only offered by private companies contracted with Medicare through stand-alone plans (for beneficiaries who have Original Medicare) and through HMOs, PPOs, and PFFSs (for beneficiaries who have a Medicare Advantage plan). Everyone who has Original Medicare or Medicare Advantage is eligible to enroll in Part D. Enrollment in Part D is voluntary.

What is covered under Part D?
Private companies that offer Part D coverage are permitted to propose their own benefit plans, as long as the overall value of the plan is at least as good as the basic plan outlined in the 2003 Medicare Act. Different plans offer various lists of covered medicines (called a formulary), and at different costs. Beneficiaries should evaluate the various drug plans available in their area to find the one that best fits their needs.

The basic Part D plan usually meets the following criteria:

  • The annual deductible can’t be more than $360
  • The plan must cover at least two drugs in each drug class
  • Members must be able to seek an exception if a drug is medically necessary but not covered under the plan
  • Plans must have a network of pharmacies that provide convenient access
  • Lists of covered drugs and pharmacy networks must be readily available to members
  • Plans must work with nursing homes
  • Plans must help transition a member’s current drug coverage
  • Plans must offer catastrophic coverage that is at least as good as the coverage outlined in the 2003 Medicare Act

What is not covered?
Some drugs are not required to be covered by Medicare Part D, including:

  • Over-the-counter drugs
  • Most prescription vitamins and minerals
  • Certain anti-anxiety and anti-seizure drugs (barbiturates and benzodiazepines which will become covered in 2014)
  • Fertility drugs
  • Erectile dysfunction drugs when used for the treatment of sexual or erectile dysfunction
  • Drugs for weight loss or gain, and anorexia
  • Cosmetic and hair growth drugs
  • Drugs that treat symptoms of the common cold (e.g., coughs, congestion)
  • Drugs covered under Part A or Part B

Late Enrollment Penalty?
The late enrollment penalty is an amount that is added to your Part D premium. You may owe a late enrollment penalty if one of the following is true:

  • You did not join a Medicare drug plan when you were first eligible for Medicare, and you didn’t have other creditable prescription drug coverage. Creditable Prescription Drug Coverage is coverage that is expected or anticipated to pay, on average, at least as much as Medicare’s standard prescription drug coverage. Typically, this coverage is provided from an employer or union. Anyone who has this kind of coverage after they become eligible for Medicare can normally keep that coverage without paying a penalty if they decide to enroll in a Medicare Prescription Drug plan later.
  • You did not have Medicare prescription drug coverage or other creditable prescription drug coverage for 63 days or more in a row.
The cost of the late enrollment penalty depends on how long you didn’t have creditable prescription drug coverage. Currently, the late enrolment penalty is calculated by multiplying 1% of the “National Base Beneficiary Premium” which is $33.13 for 2015, times the number of full, uncovered months that you were eligible but didn’t join a Medicare drug plan and went without other creditable prescription drug coverage. The final amount is rounded to the nearest $.10 and added to your monthly premium.

What our clients say

“Jason has been very good to help me through this process. He is always very prompt with returning my calls and addressing whatever issued I might have. He has been my agent for quite some time and I would highly recommend him.”

Terry Vickers, North Wilkesborro, NC.

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