Medicare Prescription Drug Insurance

In the Fall of 2005 the Federal Government announced the introduction of prescription drug coverage to made available to all people covered by Medicare health insurance. The initial effective date was January of 2006. This short window of opportunity created confusion and distress for millions of Seniors. Hidden beneath the confusion was a tremendous boon for America’s Seniors. They are finally getting assistance with the high cost of prescription drugs.

The Government has distributed RX coverage through insurance companies. The government subsidizes each company a certain amount of money for each person insured. Each company is required to provide Basic coverage according to government guidelines. They are permitted to offer other plans with expanded coverage as well. Many do. Insurance companies establish their own monthly premiums and this will vary from company to company and state to state.

By government design coverage ends at the “doughnut hole” for the next couple of thousand dollars before it picks up again. Some drug programs will cover generic drugs during the “doughnut hole” as well.

In addition, one of the most important components of an insurance company’s drug plan is the formulary which it utilizes. A formulary is a listing of drugs covered and  levels at which  they are covered. Most companies have tiered the levels of copays they require from the insured into Preferred, Preferred Brand, and Non-Preferred Brand.  Some drugs are not covered on a given formulary.  It is imperative that you check your drugs against a company’s formulary before you decide.

Prescription Drug Plans may be purchased on-line, through your Pharmacist or through insurance agencies.