Medicare-certified plans are managed through private insurance companies to provide prescription coverage. Each plan has its own formulary, or list of approved drugs.
Medicare Advantage Plans
Sometimes called "Medicare replacement plans," these plans provide Medicare Part A and B coverage as well as prescription drug coverage through a private insurance company. Medicare Advantage Plans are usually Health Maintenance Organizations (HMOs) or Preferred Provider Organizations (PPOs).
Selecting a Plan
There are many Medicare Part D choices, and one size does not fit all. Before you decide on a plan, you should consider the prescription medications you take, the pharmacy with whom you prefer to do business, and the costs of the plan. The Medicare Plan Finder (see the Resource section of this article) can help you find the most beneficial plan for you.
What is the Donut Hole?
Medicare D plans have an initial coverage limit known as the "donut hole." In 2010, that coverage limit was $2830. Once this limit is reached, you are responsible for all your prescription drug costs until you reach an out-of-pocket total of $6440. As of 2010, Medicare Part D recipients are eligible for a one-time reimbursement of $250 to help them through the donut hole.
Medicare Part D provides assistance with the cost of prescription medications. Anyone who qualifies for Medicare has the right to join a prescription drug plan. If you want prescription coverage, however, you must select a plan and join it. Medicare will not automatically assign you to one.