Before 2006, Medicare did not cover outpatient prescription drugs. Medicare paid for some drugs administered during a hospital admission (under Medicare Part A) or a doctor’s offer (under Medicare Part B), but did not cover outpatient prescriptions drugs until Medicare Part D went into effect on January 1, 2006 as part of the “Medicare Prescription Drug, Improvement, and Modernization Act of 2003.”
Medicare Part D is important as it helps Medicare beneficiaries pay for outpatient prescription drugs purchased at retail, mail order, home infusion or long-term care pharmacies. Before Medicare Part D’s creation, Medicare beneficiaries needed to pay out-of-pocket for these drugs. Medicare Part D helped lower the cost of prescription drugs of millions of Medicare beneficiaries.
As of 2021, 48 million of more than 62 million people covered by Medicare are enrolled in a Medicare Part D plan.