Senior Health Insurance

Medicare Prescription Drug Coverage is also known as Medicare Part D. The program began in 2006 helps reduce Medicare recipients costs who have need costly prescription drugs.

This coverage is offered only through private health insurance carriers. Unlike Medicare Parts A and Medicare Part B, You cannot get this coverage from the federal government although there is a lot of government oversight of the companies that offer Medicare Part D.

The carriers may offer different deductibles or cost shares, but they have to meet certain minimums. There is a standard benefit that the policies have to equal or exceed.

Although the Part D policies can offer lower benefits when compared to specific aspects of the standard benefit policy, they have to make it up in other aspects. Any Part D prescription drug policy has to be the actuarial equivalent or better than the standard benefit policy.

The standard benefit for 2011 requires that the insured pays the first $310 of his or her prescription expenses. Then the plan will pay 75% of any additional expenses until the total expenses reach $2,840 including the deductible.

When expenses exceed $2,840 you enter what is known as the “coverage gap.” The coverage gap ends when expenses reach around 6,719. During the coverage gap the insurer pays 7% of the cost of generic drugs. The drug manufacturers pay 50% of the cost of generic drugs.

The “coverage gap” ends when the insured reaches $6,719.03 as a maximum. It can end earlier. It can end when the total Rx costs reach as little as $6,447.50. The percentage of name brand drugs verses generic drugs determines the dollar figure at which the coverage gap ends.

When the “coverage gap” ends the plan will pay 95% of the cost of medicines.

These policies can save many seniors and younger Medicare recipients thousands of dollars. Until 2006 when the prescription drug program began, prescriptions were not covered by Medicare and poorly covered by Medigap policies. These policies can be a real life saver for many seniors.