The Medicare Prescription Drug Act

The Medicare Prescription Drug Improvement and Modernization Act of 2003 established Medicare Part D and changed the Part C (Medicare+Choice) Plans established in the Balanced Budget Act of 1997. Part D is prescription drug coverage offered by an insurance company that works with Medicare.

Part D Requirements

To qualify for Part D, a person must be over the age of 65 and enrolled in Medicare Part A. If a person has prescription drug coverage through his employer or union, he should check with his benefit administrator before making any changes.

How Part D Works

Each plan must meet the standards required by the government. The maximum annual deductible is $250, but some plans may lower or waive this deductible. The amount of the copays for prescriptions, and the formulary used, vary from company to company. Once the total annual amount spent for prescriptions reaches $2250, most companies require the beneficiary to pay for all prescription costs until the total amount paid reaches $5100. Some may offer generic drugs with a copay during this "donut hole" period. Any prescription cost over $5100 per year is paid by insurance.

Part C Requirements

Part C is usually a lower-cost alternative to a Medigap Plan. To qualify for Part C (Medicare Advantage Plan) coverage, a person must reside in the area where she wishs to join, be enrolled in Medicare Part A and Part B, and not have end-stage renal disease.

How Part C Works

Enrollees receive all of their health care services--including Part A and Part B coverage--through their Medicare Advantage Plan provider. They receive a health card from their provider. Providers usually offer extra benefits with their plan and may include Part D.

Contact Information

Call the Social Security Administration at 1-800-772-1213 or visit the website linked below for more information. Call 1-800-MEDICARE or visit the websites linked below to see if you qualify for extra help to pay for Part D premiums and drug costs.

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