This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

The ABCs of Medicare: Prescription Drug Plans

Editor's note: This is the third in a series of three stories on Medicare. The first part compared the relative benefits of original Medicare and Medicare Advantage; the second part discussed the different kinds of supplemental coverage, or Medigap, available to people who use original Medicare.

Let's move onto Medicare Part D, which is the part that is entering open enrollment this month. Part D represents prescription drug coverage offered by private providers.

If you have selected original Medicare, then you will need to choose a stand-alone prescription drug plan from one of these providers. If you are using a Medicare Advantage plan, then in most likelihood your insurer includes the drug coverage as part of the plan.

While minimum coverage is mandated by Medicare, plans may offer better coverage in terms of lower deductibles, out-of-pocket limits and access to medications in the gap between the initial coverage limit and out-of-pocket threshold (often referred to as the "donut hole"). (The standard benefit parameters for 2008, as compared with 2007, are listed at the end of this article.)

If you have been using a stand-alone prescription drug plan for the last year or two, then you have enough information to make a more educated decision in choosing a plan this time around. If you spent more than $3,600 out of pocket (or if you will by year-end), then you need to look at plans that don't require a deductible to be met and have coverage in the so-called "donut-hole" or coverage gap.

While you probably selected your current plan on the basis of the monthly premium, in this case you would be better off paying a higher premium for a plan that offers more complete coverage.

You will want to use the Medicare Prescription Drug Plan comparison tool at www.medicare.gov to get a complete list of plans in your area. You can check out Terry Savage's article for more details about the tool.

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,488.84 +89.17 0.54%
S&P 500 1,919.99 +15.98 0.84%
NASDAQ 4,364.5770 +48.5030 1.12%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs