Medicare Part D plans, or Medicare Prescription Drug plans, provide drug coverage to Original Medicare, and certain Medicare Cost Plans, Medicare Private Fee-for-Service (PFFS) Plans and Medicare Medical Savings Account (MSA) Plans. In order to get Medicare Part D, you must join a plan run by an insurance company or other private company approved by Medicare. Medicare Part D plans can vary in cost and drugs covered. At HealthPocket, you can use our Medicare Plan Comparison Tool to find the right Medicare Part D plan in order to minimize your out of pocket Medicare drug costs.1
An individual enrolled in any Medicare Part D plan will have out of pocket costs each year associated with their Prescription Drug Plan:
Typically, consumers pay a monthly premium for Medicare part D plans. If you make above $85,000 individually or jointly make more than $170,000, you will have to pay an additional fee on top of your monthly Medicare Part D premium based on the following table.
|If Your Yearly Income in 2010 was||You pay|
|File Individual Tax Return||File Joint Tax Return|
|$85,000 or less||$170,000 or less||Your Plan Premium|
|above $85,001 up to $107,000||above $170,001 up to $214,000||$11.60 + Your Plan Premium|
|above $107,001 up to $160,000||above $214,001 up to $320,000||$29.90 + Your Plan Premium|
|above $160,001 up to $214,000||above $320,001 up to $428,000||$48.10 + Your Plan Premium|
|above $214,000||above $428,000||$66.40 + Your Plan Premium|
HealthPocket recently reviewed Medicare’s landscape data for stand-alone prescription drug plans. The research showed that premiums, on average, remained stable for the most recently released drug plans ($53.80 for 2014 versus $53.74 for 2013).
A deductible is the amount a consumer must pay before your Medicare Part D Plan begins to pay its share of drugs covered by the plan. Part D Plans can have different annual deductibles (some plans don't have any) but all Medicare drug plans have a cap (in 2013, the maximum annual deductible is $325).
After you have paid the deductible, you pay an amount for each of your prescriptions, either through a copayment or coinsurance. Coinsurance means you pay a percentage of the drug cost whereas a copayment means you pay a set amount. Certain Medicare Part D plans have varying levels of copays or coinsurance, depending on the type of drug.
Depending on your situation, there could be other costs associated with Medicare Part D plans. These expenses include premiums, deductibles, costs associated with the Medicare Coverage Gap (a.k.a. the Medicare Part D Donut Hole), or a late enrollment penalty for your Medicare Part D Plan. Alongside these costs are sources of assistance such as the Extra Help program.2
A recent report shows fewer drugs on average within Medicare Advantage formularies (i.e. list of covered drugs) for 2014 as compared to 2013 Medicare Advantage formularies. Some plans place restrictions on their covered drugs. The three most common restrictions are:
It is important to confirm that an enrollee’s medications are listed within a plan formulary prior to enrolling within a plan. If the drugs are not listed, the enrollee will have to pay the full cost out-of-pocket from the drugs and the amount paid will not be considered for protection from catastrophic drug costs.