Medicare Part D History Timeline
Let’s take a brief look at the Medicare Part D history timeline. Medicare Part D, or Medicare Prescription Drug Coverage, is not a part of the Original Medicare as provided by the federal government. The federal government contracts with private companies to sell this particular kind of supplemental Medicare insurance. There are two main sources of Part D coverage.
Stand Alone Plans
The first is Prescription Drug Plans, or PDPs. These are standalone companies that sell only prescription drug coverage and do not provide hospital or medical insurance coverage. United HealthCare is an example of the companies who provide these plans through their contracts with the federal government.
The second source of coverage for Medicare Part D plans are Medicare Advantage Prescription Drug Plans, or MA-PDs. These are Medicare Advantage Plans, which cover hospital, medical, and prescription drug coverage in a single plan. In other words, these Medicare Advantage Plans cover Original Medicare and prescription drug coverage. Medicare Part C is another name for MAPD. There are four main categories of MA-PD plan types.
Health Maintenance Organizations (HMOs):
These follow what is called a gatekeeper model, meaning that every aspect of the beneficiary’s coverage is controlled by the plan and the plan’s membership. The primary care physician must belong to the HMO, the beneficiary must choose specialists that are within the plan, and the prescription drug coverage must be taken from the HMO as well instead of a separate prescription drug plan (PDP).
Preferred Provider Organizations (PPOs):
This is similar to the previous HMO plan in that the beneficiary must choose a primary care physician, but they do not need to have a referral to see a specialist. While they can choose care out-of-network, they will pay more to do so. In PPOs as well as HMOs, the beneficiary must take the prescription drug coverage offered with the plan rather than choose a separate PDP.
Private Fee for Service Plan (PFFSs):
These are by far the most flexible plans, in which beneficiaries can choose any licensed provider in the United States who is authorized to provide services and agrees to treat them. Like the PPOs, however, members may pay more in fees if they choose to go to a provider who is not a member of the licensed group of practitioners that are contracted with the insurance company. Some PFFSs provide a prescription drug plan and some do not. If the PFFS provides a prescription drug plan, the beneficiary has to take the coverage offered. If the PFFS does not provide drug coverage, then they can choose to get their prescription drug coverage through a separate PDP.
Special Need Plan (SNP): There are three segments of the population who are eligible for these Special Needs Plans. 1. People who are considered dual eligible, meaning they have qualified for both Medicare and Medicaid. 2. People who are institutionalized. And 3. People who have chronic conditions. People who belong to an SNP must take the prescription drug coverage provided and may not go through a separate PDP to access alternative coverage.
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