Medicare Prescription Drug Program

On December 8, 2003, Congress passed a comprehensive Medicare prescription drug program, known as Medicare Part D.  This program was aimed at providing Medicare recipients with prescription drug insurance.

The move came as a result of research findings indicating that when Medicare beneficiaries did not have outpatient prescription drug insurance, they paid roughly 20% more than patients with insurance coverage.  These benefits were introduced as part of the Medicare Modernization Act.

Medicare Prescription Drug Discount Card

Starting in May 2004, Medicare beneficiaries without prescription drug coverage had an opportunity to apply for a Medicare prescription drug discount card.  Those cards were first distributed in June 2004.  It was hoped that the discount card would allow individuals to save between 10 and 15 percent on their annual prescription drug spend, with discounts ranging up to 25% off the cash price of individual drugs.

These discount drug cards were not intended to provide a true prescription drug insurance benefit to individuals, rather the intention was to provide for a discount program until a more comprehensive program could be introduced - Medicare Part D.

Medicare Part D

Starting in January 2006, everyone with Medicare, regardless of income, health status, or prescription drug usage, now has access to prescription drug coverage.  The Medicare prescription drug plan covers both generic as well as brand name prescription drugs.  This program is supported by participating pharmacies located throughout the United States.  The purpose of this program is to provide protection against the high cost of prescription drugs.

Medicare Part D Eligibility

You're first eligible for Medicare Part D when you enroll in the Medicare program.  Eligibility usually starts three months before you turn age 65, and concludes three months after you turn age 65.  If you do not sign up when you're first eligible, then you will normally be assessed a penalty to join.
 
Open enrollment for Medicare Part D begins around November 15th of each year, and extends to December 31st.  The sooner you choose an insurance carrier, the more certain you'll be that benefits will flow smoothly in January.

You can enroll in a Medicare prescription drug program in one of several ways, including:

• By joining a Medicare prescription drug plan.
• By joining a Medicare Advantage Plan, or
• Enrolling in a Medicare Health Plan that offers drug coverage.

Part D Premiums

When you enroll in Medicare Part D, you'll be required to pay a monthly insurance premium.  The exact premium paid will vary by plan.  Deductibles as well as copayments and coinsurance payments will also apply.  You can find a Medicare approved insurance provider by visiting the Medicare website.

While some prescription plans may offer additional coverage, this benefit usually comes with a higher monthly premium.  Qualifying individuals may not have to pay premiums or deductibles; however, you need to contact Social Security at its toll free telephone number 1-800-772-1213 (TTY 1-800-325-0778) to find out if you qualify.

Pharmacy Networks

A state is the smallest service area or network geography that is permitted in the Medicare prescription drug program.  This means that the pharmacy network coverage has to be at least the size of the state in which it is offered.  Minimum requirements for these networks also include:

• For urban areas, 90% of Medicare participants must live within 2 miles of a network pharmacy.
• In areas of the country considered suburban, 90% of Medicare participants must live within 5 miles of a network pharmacy.
• Finally, for rural areas, 70% of Medicare beneficiaries or participants must live within 15 miles of a network pharmacy.

Prescription Drug Program Privacy

Approved discount prescription drug programs are required to comply with all HIPAA privacy provisions.  A participant's protected health information or PHI can only be used for the health care operations, and in the marketing of products and services that are within the scope of this particular Medicare endorsement.

Medicare Part D Solicitations

The Medicare Part D prescription drug plan is in the news on a daily basis.  Before signing up, chances are you'll be gathering information on the drugs you need, options offered by various plans, as well as writing down the coverage you'll be looking for in a plan.

Not everyone that contacts you about Medicare Part D will have your best interests in mind.  The Federal Trade Commission (FTC) has issued a number of warnings concerning solicitations from scam artists claiming to represent Medicare Part D providers.  What these swindlers are really after are Social Security Numbers, checking accounts, and credit card numbers.  This information is then used to commit financial fraud.

The FTC and the Centers for Medicare & Medicaid Services, want you to know how to protect yourself and your personal identification information.  You can report suspicious activity with the U.S. Department of Health and Human Services Fraud Hotline at 1-800-447-8477.  You may also call the FTC at 1-877-382-4357.

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