What is Medicare Plan D?
Medicare Part D, or Plan D, is a government initiative established on New Year’s Day, 2006. It was designed to compensate for inadequacies in original Medicare by providing prescription drug cover to policyholders. This highly useful initiative means that those aged over 65 receive cover for all or part of their prescription drug costs, provided they have a prescription drug plan or a Medicare Advantage plan that is additional to medical coverage.
Who Has Medicare Plan D?
Medicare D is available to all who qualify for original Medicare, and must be bought in addition to a standard Medicare plan or as part of Medicare C. Most people (over 65%) opt for a PDP or Prescription Drug Plan. In total almost 30 million people are currently enrolled under Medicare Part D plans, with almost 2000 standalone plans available, with most policies bought by those living in the combined state of West Virginia, and the commonwealth of Pennsylvania (58% of eligible persons).
What are the Costs?
Costs vary depending on the beneficiaries’ geographical position. There are several resources online which will help you in deciding which plan to opt for as well as licensed agents willing to help you determine the best Medicare Plan D at the best rate. Standard plans are available once beneficiaries pay the deductible of $310. They will then have to pay 25% of their medication fees (known as a coinsurance) until they reach a threshold of $2830.00.
If a person requires medication beyond this price threshold, they must pay 100% of costs until out of pocket expenses reach $4,550.00. This void in coverage is known as the coverage gap or “Donut Hole”. Medicare Coverage is calculated between January 1st and December 31st of each year.
$2,830.00 may sound like a lot, but in actual fact, last year over a quarter of Plan D beneficiaries reached the coverage gap that did not qualify for low income subsidies. Of these, 5% had drug spending of an amount high enough to reach the other side of the Donut Hole, or “catastrophic coverage” zone.
Those who believe they will hit the coverage gap during the course of the year can save money by opting for gap coverage, as part of their Medicare supplement protection. Substantial savings can also be made by opting for generic drugs as opposed to their brand name counterparts. Average costs of Medicare Plan D PDP’s in 2011 were $39.75 per monthly premium. This usually increases at a rate of around $2.60 dollar a year.
Subsidies for Those of a Low Income:
Persons who find it difficult to meet drug costs, despite Plan D coverage may qualify for a low-income subsidy. Those below the 150% poverty margin can have all or most of their premiums, copayments and deductibles paid. On average, almost 13 million people qualify for this service yearly.
Affordable Drugs as Part of Your Medicare Service
As you can see, Medicare Plan D is currently helping millions of citizens manage their prescription drug costs in later life. With a host of benefits to help those of low incomes and those with large drug expenditure, there really is a lot to gain from enrolling in Medicare Part D plans. Talk to a licensed agent though www.bestmedicaresupplement.com if you need any advice on buying a Medicare Plan D policy.
Part D Statistics for 2012