Medicare Drug Plan: What It Is, How to Use It

Medicare Part D, the section of the government's health insurance program for seniors that helps pay for prescription drugs, can look confusing -- so here's a guide to help you understand what's covered, and what to look for in the benefits.

This is an outline of what to look for generally. Keep in mind that the pricing of these plans is very complex, but in general, expect to pay more for better coverage.

Standard Minimum Plan

Medicare prescription drug coverage is only available from private companies that have been approved by Medicare.

All private companies that are approved to offer Medicare's prescription drug benefit must offer a minimum drug benefit, known as the Standard Medicare Drug Benefit. However, many have designed their offerings differently, generally offering more benefits.

How to Access Coverage

In order to get Medicare prescription drug coverage, you must enroll in a private drug plan. There are two ways to get that coverage: standalone prescription drug plans and Medicare Advantage plans.

Standalone Prescription Drug Plans, or PDP, provide coverage only for prescription drugs. Upon enrolling in a PDP, you will receive your Medicare prescription drug benefits and pay a separate Part D premium to the plan. (Your premium pays part of the total cost of the plan; the remainder is funded by the government.) You then combine this coverage with your Original Medicare benefits and any other health care coverage.

Medicare Advantage Prescription Drug Plans, or MA-PDP, provide you with "one-stop shopping" for all your Medicare benefits, including hospitalization (Part A), medical services (Part B) and prescription drugs (Part D). These plans will also receive government funding.

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