Medicare Part D was made possible by the Medicare Prescription Drug, Improvement, and Modernization Act and went into effect on January 1, 2006. Medicare Part D is the coverage plan which offers prescription drug coverage to everyone who has Medicare.

To receive Medicare Part D, you have to be enrolled in either a stand-alone Prescription Drug Plan (PDP) or a Medicare Advantage Plan with prescription drug coverage (MA-PD). Part D plans are not standardized like Parts A and B. Plans choose which drugs – or drug classes – they want to cover, at what tier, and are able to exclude certain drugs. There are certain drugs that Medicare automatically excludes, including benzodiazepines, cough suppressants and barbiturates. If a plan covers excluded drugs, they may not pass those costs on to Medicare. If a plan does bill Medicare for the excluded drugs, they are required to repay CMS. If beneficiaries are dual-eligible (Medicare and Medicaid eligible), Medicaid might pay the drugs not covered by Medicare Part D along with other restricted, controlled substances.

You might not take a lot of prescription drugs now, but you should still consider enrolling in a Medicare drug plan when you are first eligible, otherwise you may incur penalty fees. Penalty fees include an additional fee of 1% per month to your premium cost each month you wait to join.