What About Medicare Rx

In 2003, Congress passed the Medicare Modernization Act. The primary purpose of this legislation was to add pharmacy Rx which was not part of original Medicare into the Medicare program. This is now Part D of Medicare, and private insurers market plans to Medicare enrollees with subsidies and tight regulation by CMS, the Centers for Medicare and Medicaid Services.

In 2009 the average cost of a prescription plan was $35 per month, going up to about $40 in 2010. All insurers must offer plans equal to or better than the basic plan designed for Medicare which has a deductible and coinsurance which goes up each year. In 2010 the deductible will be $310, and then after this medicare pays 75% of Rx cost until the enrollee is out of pocket $2830. The next $2000 some odd dollars include no coverage, and if the medicare enrollee does utilize enough Rx to reach the end of this coverage gap, fondly called the doughnut hole by Seniors, then Medicare pays 95% or more of all Rx costs. Medicaid eligibles, and people eligible for assistance have lower out of pocket costs, no out of pocket costs, and sometimes no premium.

The program is far from perfect, but until this was voted into law, there was no Rx coverage with Medicare, except during a hospitization. Plans most often write plans better than the basic Medicare plan.

Some Medicare Facts

Medicare has 4 parts. A, B, C & D. Parts A and B are original Medicare. Part A, paid for by payroll taxes, covers hospitalization for Medicare Beneficiaries. Part B, covers visits to physicians and outpatient care. Part B has a premium, $96.40 per month for most people, more for individuals earning over $85K per year. Part C is coverage for people joining HMO, PPO and PFFS plans, and Part D is the new outpatient prescription drug benefit of Medicare and Social Security. The average monthly premium for this is approximately $35 per month.