Medicare Part D is a federal program to subsidize the costs of prescription drugs for Medicare beneficiaries in the United States. The Medicare Prescription Drug program (Part D) was created through the Improvement and Modernization Act of 2003 (also known as the MMA).In 2015, there are currently 31 drug plans in California offering plans with monthly premiums ranging between $15.70 to $145.70. Most California Seniors have a difficult time understanding what a Part D plan is and which one they should choose. If you have a medicare supplement it’s a wise decision to have a Medicare Prescription Drug Plan (PDP). PDP’s are designed to supplement Medicare Parts A&B and will greatly reduce the cost of medicines you take. If you should decide not to sign up for Part D keep in mind that you can be charged a Late Assessment Penalty (LEP). This penalty is calculated by the number of months that you were without credible coverage, multiplied by 1% of the national average premium of a Part D drug plan (.32 per month for 2010).
Medicare drug plans cover both generic and brand-name drugs. Each plan has a list of drugs it covers, called a formulary. This list must always meet Medicare’s minimum requirements (for example, plans are required to include at least 2 drug options in each drug category), but it is not required to include all prescription drugs (see Covered Drugs). In certain circumstances, Part D plans may change their formularies during the year.
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Medicare Prescription Drug Plans (PDP’s) and Medicare Advantage Prescription Drug Plans (MA-PD’s), are required to cover drugs in all 6 categories: