The Part D drug benefit is prescription drug coverage for people with Medicare. Medicare offers Part D to everyone with Medicare. (People enrolled in Medicare are called Medicare beneficiaries.) Part D coverage may help you lower your prescription drug costs and help protect you from higher costs in the future. It can give you greater access to the drugs you need to stay well or treat an illness. To get Medicare Part D drug coverage, you must join a plan that is run by an insurance company or other private company that has been approved by Medicare.

If you join a Medicare drug plan, you usually pay a monthly premium. If you decide not to join a Medicare drug plan when you are first eligible (able to join), you may pay a penalty if you decide to join later. If your income and resources are limited, you might qualify for extra help paying Part D costs. We will cover this later in the section "Beneficiary choices."

The plans vary in cost and which drugs are covered and it is hard to compare them. As a cancer patient, your annual drug expenses may be large, so it is important to look at each plan's coverage, as well as your cost-sharing obligations during coverage gaps. Coverage gaps are dollar limits that, when reached, leave you responsible for some or all of the drug costs.

What is the coverage gap, and what do I pay?

The coverage gap or "donut hole" is the gap in which you must pay 100% of your prescription costs. Once your total drug costs (what you and the plan pay for your prescriptions) reach a pre-set dollar amount for the year, you will hit the "donut hole." Then you will pay all of your drug costs until the total out-of-pocket costs reaches another pre-set amount. Reaching this amount triggers what is called catastrophic coverage. After that, Medicare Part D will cover 95% of your drug costs and you will pay a flat co-pay or 5% of the cost of the drug for the rest of that year. (Keep in mind that some cancer drugs cost a lot and 5% can be several hundred dollars a month.)

2009 example: If your total drug costs (what you and the plan pay for your prescriptions on your plan's formulary) are greater than $2,700 in 2009, you will probably hit the coverage gap. Then you will have to pay 100% of your drug costs until your out-of-pocket costs reach $4,350 (or your total drug costs hit $6,153.75). After that, you will pay 5% or less of the cost of prescriptions on your plan's formulary for the rest of 2009. These dollar amounts change from year to year, so you will need to check the amounts that apply each year.

If your drug plan has a coverage gap (donut hole), here are some ways you can avoid or delay entering the gap, and save money on drug costs while in the gap:

See if you can switch to generic drugs or other lower-cost drugs. Ask your doctor about drugs that would work just as well as the ones you’re taking now. Even though many cancer treatment drugs do not have generics, the savings in non-cancer drugs may be enough to help you avoid the coverage gap. You can find out more about saving money by using mail-order pharmacies, generic, or less-expensive brand-name drugs from the Compare Medicare Prescription Drug Plans section of www.medicare.gov on the Web.

Keep using your Medicare drug plan card, even if your drug expenses fall into the donut hole. Using your drug plan card ensures that you’ll get the drug plan’s discounted rates and that the money you spend counts toward your catastrophic coverage.

Do I have to take part in the Part D benefit?

The new Medicare prescription drug benefit, or Medicare Part D, became available to all people on Medicare (Medicare beneficiaries) on January 1, 2006. The drug benefit is optional – you do not have to take part in the program. But if you decide to take part, you must do so during the open enrollment period (from November 15 to December 31 every year). You must enroll in one of the Medicare private drug plan options available in your area. After you have enrolled, you can change from one plan to another during open enrollment periods.

How does the Part D benefit help people with cancer?

For cancer patients, this new benefit covers some drugs that were not covered in the past. Before Medicare Part D, Medicare covered only those prescription drugs given as injections in doctors' offices or treatment centers. That included many cancer drugs. Coverage of these cancer drugs will continue under Medicare, while the new Part D coverage will help pay for the prescription drugs you buy at a pharmacy.

The new Part D drug benefit is good news for Medicare beneficiaries who have been diagnosed with cancer, especially those who do not have any other way to pay for their prescriptions. Medicare Part D drug plans must accept all who apply and are eligible – no matter their age or health status. Still, the coverage under this benefit does have some gaps that require out-of-pocket spending. And, not every drug on the market will be covered by every Medicare-approved drug plan. It is very important that you carefully review your drug plan options and compare the plan's covered drugs to the drugs you take. Keep in mind that the plan can change, and you may need to look around again next year.

Last Medical Review: 10/23/2008
Last Revised: 02/12/2009