Medicare Part D

Medicare Part D is one component of the overall Medicare program, which is a national health insurance program that insures approximately 60 million individuals. Whereas Medicare extends to a wide variety of medical treatment, Part D is focused specifically on making drug prices more affordable for American senior citizens. Although it was enacted into law in 2003, it began providing coverage to users on Jan. 1, 2006.

Those who are already covered by Medicare generally have the option of opting in to Medicare Part D. If they do so, they will be charged the same kinds of costs found with standard insurance plans, such as monthly premiums, annual deductibles, and various copays. In exchange, they can receive additional coverage for prescription drugs as compared to what is already offered by the broader Medicare program. For this reason, different individuals are free to choose whether subscribing to Medicare Part D makes economic sense, given their health needs and financial circumstances.

Generally, participants would opt to enroll in Medicare Part D when they first become eligible for the program. Otherwise, they may incur a late enrollment penalty unless they meet certain criteria, such as having other creditable prescription drug coverage. The government categorizes creditable prescription drug coverage as that which is expected to pay at least as much as Medicare’s standard prescription drug coverage. For this reason, those who are already covered by creditable plans are unlikely to opt in to Medicare Part D.