The Smart Way to Choose a Medicare Part D Plan
Medicare Part D plans, also called Medicare Prescription Drug Plans or PDPs, allow you to add prescription drug coverage to your original Medicare package. Given how expensive prescriptions can be, it's wise to purchase a Part D policy if you don't have prescription drug coverage from another source. However, picking the wrong policy can be incredibly expensive, since Part D policies vary widely in how much they cost and which drugs are included in the plan.
If you choose to sign up for original Medicare (which includes Medicare Part A and Part B) rather than a Medicare Advantage plan, you can also sign up for a Part D plan to help cover the cost of any prescriptions you take. Every Medicare Part D plan has a formulary, a list of prescriptions that the plan covers (at least in part). If a prescription isn't on the plan's formulary, it's not covered and you'll have to pay the full cost yourself.
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Source: Fool.com