Eight must-knows about medicare Part D prescription drug coverage.

On Jan. 1, Medicare formally launched its first prescription drug coverage, known as Part D. Enrollment began Nov. 15, 2005, for the program, which gives Americans 65 and older access to coverage from dozens of private insurers subsidized by the agency. Current Medicare recipients have until May 15 to enroll or risk a penalty.

For many seniors, the sheer number of coverage providers assigned by the government will make Part D complicated, but if you already are working with a financial planner, it might be worth asking his or her help as well. Sign up is not mandatory, but experts advise even those who have private drug coverage to check out Part D just to understand the proper ways to transfer to the program if they need to later on. Children of seniors also might want to brush up on Part D in case they need to help their parents decide.

Here is some basic information about Part D from the Financial Planning Association, Denver, Colo.

Obtaining the coverage. Part D has a "standalone" version of the plan that provides drug coverage alone to those who wish to stay in the traditional Medicare fee-for-service program for all their health care needs. There also is the managed care alternative, Medicare Advantage, a plan that covers both medical services and prescription drugs.

Types of coverage. This is where it gets tricky. In your state, there may be a dozen or more companies providing plans, and it is very important to get advice on which plans cover the drugs you currently are using or may be likely to use. You also might want to speak with your physician about possible replacement prescriptions if alternate medications may make your choice easier. You will have the option to change plans once a year, so if you do not have to take many drugs now, go with the lowest premium plan and switch later.

What it costs. Under the standard benefit for 2008, participants will have to pay a premium between $20-40 a month (each plan varies) with an annual deductible of $250 before coverage kicks in. Participants then have to pay $500 of the next $2,000 of drug...