Part D plans offer prescription drug coverage. Anyone who has Part A and Part B or Medicare Advantage Plans (Part C) is eligible for Part D, but it is optional to enroll. To get prescription drug coverage, a beneficiary must join a plan run by an insurance company or other private company approved by Medicare. Each plan varies as far as costs and what drugs are covered. An additional monthly premium is charged.
Part D is financed by general revenues from the federal government (82 percent), payments from the states for dual eligibles (people enrolled in both Medicare and Medicaid, 7 percent) and monthly premiums paid by beneficiaries.
Participants in Traditional Medicare (Part A and Part B) must enroll in Part D in order to get prescription drug coverage.
Most Part C plans provide prescription drug coverage, so participants in those programs usually do not need to buy a separate Part D plan.
Each plan has a formulary, or a list of the drugs, covered by the plan. This list must always meet Medicare’s requirements, but can be changed and updated depending on new information. Formularies are changed regularly, so people should check to see if all their drugs are included in the formulary for the next year and whether the prices have changed.
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