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What is Part D of Medicare?

Medicare Part D is a voluntary prescription drug program offered by the U.S. federal government for people who are eligible for Medicare. It became effective on January 1, 2006, and provides prescription drug coverage to help beneficiaries pay for the cost of prescription drugs.


Part D is administered by private insurance companies approved by Medicare, and each plan has its own list of covered drugs, known as a formulary, as well as premiums, deductibles, and copayments. Beneficiaries can choose to enroll in a standalone Part D plan to add drug coverage to their Original Medicare, or they can choose a Medicare Advantage plan that includes both medical and drug coverage.


Part D coverage is designed to help lower the out-of-pocket costs for prescription drugs, which can be a significant expense for seniors and individuals with disabilities. The program also includes a coverage gap, commonly known as the "donut hole," where beneficiaries pay a higher percentage of the cost of their drugs until they reach a certain threshold. After that threshold, catastrophic coverage kicks in, which provides more extensive coverage for high-cost medications.



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