Part D / Prescription Drugs: Medicare
Prescription drug use increases with age, along with the prevalence of chronic and acute health problems. The Medicare Modernization Act of 2003 established Medicare Part D, an outpatient prescription drug benefit that took effect in 2006. Through Part D, Medicare beneficiaries have access to prescription drug coverage offered by private health plans, either stand-alone prescription drug plans (PDPs) or Medicare Advantage prescription drug (MA-PD) plans, such as HMOs or PPOs. Part D plans are required to provide a “standard” benefit or one that is actuarially equivalent, and may offer more generous benefits. In general, individuals who sign up for a Part D plan pay a monthly premium, along with cost-sharing amounts for each prescription. Currently, 90 percent of all Medicare beneficiaries have prescription drug coverage, with 26 million Medicare beneficiaries enrolled in a Part D plan and another 10 million receiving drug coverage from an employer or union plan.