Issue Brief

Issue Brief: Overview of the Medicare Part D Program

Medicare Part D is a voluntary prescription drug program available to Medicare beneficiaries that provides coverage for outpatient prescription drugs (i.e., non-inpatient prescriptions that patients typically fill at pharmacies). Established in 2006 by the Medicare Modernization Act (MMA), more than 42 million, or roughly 73% of all Medicare beneficiaries, are now enrolled in Part D coverage.1,2 While Part D was considered controversial at the time of its passage, primarily due to the cost to government and the use of private plans to operate the new benefit, Part D has been a successful program. It greatly expanded coverage for prescription drugs to millions of Medicare beneficiaries, and the annual costs of the program have been below spending projections.