This is the final part of a three-part series on Medicare. The first two parts can be viewed here and here.


Medicare, Part C is, collectively, Medicare Advantage Plans (like an HMO or PPO) that are sold by private insurance companies that are approved by Medicare.  These Plans combine Part A and Part B coverage.  In most cases, Part C plans are a lower cost alternative to the Original Medicare Plan and usually provides extra benefits and includes prescription drug coverage.

Medicare, Part D is the prescription drug coverage insurance that is provided by private companies approved by Medicare.   Much like Part B, you need to enroll when you first become eligible to keep from paying a penalty cost later.

There are two ways to join the Medicare prescription drug plan.   The first is by adding it to your Original Medicare Plan (Part A) as a stand-alone coverage or as part of an approved Medicare Advantage Plan you purchase from a private insurance company such as an HMO or PPO plan (Medicare, Part C) that includes Part D coverage.   If you add it to the Original Medicare Plan, you will pay a separate fee or yearly deductible.  Most Part C private plans already include the prescription drug coverage.

This is the standard Part D drug prescription plan for 2011 measured as a yearly benefit period required by Medicare:

A.  You may be required to pay the first $310.00 of your drug costs as your yearly deductible.

B.  You then pay a co-payment until your co-payments and the portion paid by Medicare reaches a total of $2,840.00.

C.  Once you reach $2,840.00 you are in the coverage gap (or what is now famously known as the “donut hole”).   Previously, you had to pay the full cost of your prescription drugs during this gap; however, starting in 2011, you receive a 50% discount on covered brand name prescription medications.   The intent is that by 2020, the gap will be fully closed and you will only pay your co-payment.

D.  Once your out-of-pocket costs, including your deductible and co-payments, reach a total of $4,550.00 your coverage gap ends and Medicare will then pay most of the costs of your prescription medication for the remainder of the year.

There are many decisions to make when entering the world of Medicare and you should explore all of your options so that so are ready to make your choices when you turn 65.