Prescription Drug Plan (PDP) - For a Layman

Prescription Drug Plan (PDP)
Prescription drug plan covers the cost of drugs mentioned in the prescription. It is offered by private insurers in the US. It’s basically same as Medicare Part D, which is a federal program to subsidize the costs of prescription drugs for Medicare beneficiaries in the United States. It was enacted as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) and went into effect on January 1, 2006.

Medicare Prescription Drug Plans are offered by insurance companies and other private companies approved by Medicare. They add coverage to:
• Original Medicare
• Some Medicare Cost Plans
• Some Medicare Private Fee-for-Service Plans and

Status of PDPs: As of 2010 there were 1,576 stand-alone Part D plans available. One can choose plans to cover different drugs, or classes of drugs, at various co-pays, or choose not to cover some drugs at all. Because private companies are setting up the plans for Medicare, each plan will be a bit different. Some may use only certain pharmacies and others may cover only certain drugs. The cost also may vary. It is important to pick one that meets your needs.
Medicare has made available an interactive online tool called the Prescription Drug Plan Finder that allows for comparison of drug availability and costs for all plans in a geographic area.

Cost will vary depending on which plan you choose, which drugs you use and whether you get help paying your Medicare Part D costs. Most Part D drug plans charge a monthly premium (an average of $27.93), a $275 deductible and a small co-pay for each drug. Some people qualify for extra help paying their costs. If you don't qualify for extra help, your drug plan may have a "coverage gap" -- some people call it the "donut hole." A coverage gap is a period of time in which you will have to pay for all your prescription drug costs yourself. The coverage gap begins once you and your plan have spent $2,700 on prescription drugs. After that, you will continue to pay your monthly premium and you will pay for the next $4,350 of your drug costs out-of-pocket. Once you reach your coverage gap limit, you have "catastrophic coverage." This means you only pay a small amount for each of your drugs for the rest of the year.

How can one get coverage for their medical bills in the US?
• You have health insurance through a current or former employer or union.
• You are in a Medicare Advantage Plan or other Medicare Health Plan (like an HMO, PPO, or PFFS plan).
• You have Medigap (Medicare Supplement Insurance).
• You have Medicaid.
• You have Supplemental Security Income benefits or get help from your state Medicaid program paying your Medicare premiums.
• Your state pharmacy program pays for your prescriptions.
• You get prescription drug coverage from TRICARE.
• You get prescription drug coverage from the Department of Veterans Affairs.
• You are in a nursing home or long-term care facility
• You get housing assistance from HUD
• You get Food Stamps
• You get prescription drug coverage from FEHBP

Further reading:
1. http://www.medicare.gov/MPDPF/Shared/Static/tabHelp.asp?activeTab=5&Language=English
2. http://www.medicare.gov/MPDPF/Public/Include/DataSection/Questions/MPDPFIntro.asp?version=default&browser=IE%7C7%7CWinXP&language=English&defaultstatus=0&pagelist=Home&ViewType=Public&PDPYear=2010&MAPDYear=2010&MPDPF%5FMPPF%5FIntegrate=N#
3. http://en.wikipedia.org/wiki/Medicare_Part_D
4. http://familydoctor.org/online/famdocen/home/pat-advocacy/insurance/848.html
5. http://www.q1medicare.com/PartD-2010MedicarePartD-PlanStatistics.php?crit=National
6. http://www.q1medicare.com/PartD-MedicarePartDPlanStatisticsState.php