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In 2003 Congress passed the Medicare Modernization Act (Medicare Part D), which will take full effect in 2006. This does not change the benefits associated with Medicare Part A (hospital coverage) or Medicare Part B (coverage for doctors visits), but it does add Medicare Part D prescription coverage. It is important to note that the Part D prescription coverage is optional and you can choose not to enroll, but there is a penalty for signing up late.

The Part D prescription coverage is provided by private companies who offer prescription drug plans. There are two types of plans available, either Prescription Drug Plan’s (PDP’s) or Medicare Advantage Plans (also called Medicare Health Plans). PDP’s offer prescription coverage only, not medical insurance so you would keep your original Medicare and supplemental insurance and purchase this plan for prescriptions only. Medicare Advantage Plans offer both medical insurance and prescription coverage; therefore, you would no longer need supplemental coverage as well. There are three types of Medicare Advantage Plans; HMO’s (Health Maintenance Organizations) where you must have a primary care physician and referrals to specialists, PPO’s (Preferred Provider Organizations) which offers better coverage by using a provider in the network and you can go outside of the network, but you will pay more, and finally Private Fee for Service plans where you must ask the provider if they will accept the insurance and they can decide on a case by case basis.

Please note that the information contained here is subject to change at any time.

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