Medicare Part D, like all other parts of Medicare, is not free. Each month, you will pay a Part D premium as well a cost each time you purchase medications. The Part D premium will differ between insurance companies and some companies may even offer a $0 premium for an integrated MA-PD. In addition to the premium, some companies have deductibles and co-pays, the amounts of which vary by plan. If it sounds a bit complicated, it is, but we are here to help.

Probably the most talked about (and dreaded) feature of the Part D plans is the coverage gap, or so-called "donut hole." After you've met a plan's annual deductible, Part D will pay for about three-quarters of the costs of your medications, but only to the point where the donut hole begins. For 2010, the donut hole begins at $2,830, which means that once you and the insurance company have spent $2,830, your insurance coverage will stop and you will have to pay the full cost of your prescription drugs. Some plans will cover generic drugs in the donut hole, but in 2010, almost no plans will cover the expensive brand-name drugs. Read on for the good news about the Part D catastrophic benefit...

The good news is that Part D provides protection against catastrophic costs should you need many expensive medications. In 2010, that catastrophic coverage begins when you personally spend $4,550 over the course of the year. Medicare, and the insurance company, will then cover about 95% of the cost of your prescription drugs, subject to a minimum cost for generic drugs of $2.50 and for brand name drugs of $6.30. This means that if your prescription costs $200, you would only have to pay $10.

Selecting a plan is not easy. Unless you are a Medicare insurance expert, or would like to become one, comparing plans from one company or many companies is quite challenging. That's where Senior Educators Insurance Services comes in. We provide free assistance navigating your Medicare insurance decision. For free help choosing an insurance policy that meets your needs, click here.