The Medicare Part D program provides prescription drug benefits through one of two sources: (1) Medicare Prescription Drug Plans (PDP) or (2) a managed care plan with a drug benefit (i.e., Medicare Advantage (MA)). The MMA defines a standard benefit design for Medicare Part D, which is subject to variation by Part D plans. For this defined standard coverage, most beneficiaries will pay a monthly premium, estimated to be $53.99 in 2011, an annual deductible of $310, and 25% co-insurance for costs above the deductible up to the initial limit, which was $2,840 in 2011. Once the initial coverage limit is reached, the enrollee must pay all drug costs until the enrollee has $3,607.50 in out-of-pocket expenses for covered drugs, which equates to $6,447.50 in total expenditures.

The gap between $2,840 and $6,447.50 is being called the "coverage gap" or "doughnut hole." After a beneficiary has spent $3,607.50 in out-of-pocket expenses, catastrophic coverage begins and the Medicare Part D plan will pick up approximately 95% of future costs. Plans can offer a different benefit that is equal to or "actuarially equivalent" to this standard coverage and plans can also offer an enhanced benefit design (that might include coverage in the doughnut hole or no deductible) for an additional premium.

To help low-income individuals afford the prescription drug benefit, the MMA provides for extra help in paying for premiums, deductibles, and co-pays through the coverage gap and in catastrophic coverage. Please visit the government's website to get information regarding Low Income Subsidy.

To be eligible to participate in Medicare's prescription drug benefit, individuals must be enrolled in or entitled to receive benefits from Medicare Part A or B. Enrollment in Medicare Part D plans is voluntary (except for dual eligibles). The enrollment period for Part D prescription drug benefit runs annually from October 15 through December 7. During this same period, individuals may also switch or drop Medicare drug plans.

When an individual first becomes eligible for Medicare, they are able to enroll during the seven month period that begins three months before the month they turn 65, includes the month in which the individual turns 65, and ends three months after the month in which they turn 65. In the case of an individual receiving Medicare due to a disability, they are able to enroll during the seven month period that begins three months prior to the 25th month of disability, includes the 25th month of disability, and ends three months after the 25th month of disability. In some cases, people with Medicare Part D can change to another PDP or MA-PD plan outside the annual enrollment period.

To learn more about Special Enrollment, please visit the government's Medicare website.

Below are links to useful information about Medicare Part D available on the web.

AccessToBenefits.org - The "Access to Benefits Coalition" site to provide Part D information and benefits for those with limited income and resources  

BenefitsCheckUp.org - To help Medicare beneficiaries get assistance with what plans are best for them (decision support and enrollment service)

Kff.org- The Kaiser Family Foundation has a variety of resource information related to the Medicare drug benefit.