CRACKING THE CODE Understanding Medicare Parts C and D

Chapter 3: Unveiling Medicare Part D (Prescription Drug Coverage)

How Medicare Part D Works Medicare Part D works by providing beneficiaries with access to prescription drug coverage through standalone prescription drug plans (PDPs) or as part of a Medicare Advantage plan (MA-PD). These plans vary in cost, coverage options, and formularies (lists of covered drugs), so it's essential for beneficiaries to choose a plan that meets their specific healthcare needs and budget. Beneficiaries enrolled in a Part D plan typically pay a monthly premium, an annual deductible, and copayments or coinsurance for their medications. The plan covers a portion of the cost of covered drugs, and beneficiaries are responsible for the remaining cost up to a certain limit. Once the beneficiary reaches the plan's coverage limit, they enter the coverage gap, also known as the "donut hole," where they may be responsible for a higher percentage of their medication costs until they reach catastrophic coverage.

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