Glossary
Medicare Part D, defined
The prescription drug benefit of the federal health program, delivered through private plans, either standalone alongside the traditional program or built into an Advantage plan. Each plan has its own formulary, tiers, pharmacy network and premium.
In practice
The right plan depends on the specific drugs a person takes: the same medication can sit on a cheap tier in one plan and require prior authorisation in another, so the comparison is done drug by drug, ideally every autumn, since formularies change annually. Costs include a premium, sometimes a deductible, and copays or coinsurance that vary by tier, with an annual cap on out-of-pocket drug spending under current rules. Going without creditable drug coverage for more than a short stretch after becoming eligible brings a permanent late enrolment penalty added to the premium. Higher earners pay an income-related surcharge. Extra Help is a federal subsidy for people with limited income and assets. A plan offered in a county one year may not be offered the next.
A worked example
Suppose a retiree takes three brand-name medications. Under one plan the combined monthly copays are $210 and the premium is $30; under another the copays are $95 and the premium is $60. The second plan costs about $1,020 less over a year for the same drugs, which is the kind of gap a drug-by-drug comparison finds. Hypothetical figures.
Applies to: Medicare