Medicare Part D Cost | AARP® Medicare Plans from UnitedHealthcare®
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Medicare Part D Costs - Medicare Prescription Drug Plans


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What is the cost of a Medicare Part D plan?

Your Medicare Part D prescription drug plan costs may include premiums   , deductibles   , co-pays    or co-insurance   .

Drug costs are based on the plan's negotiated prices and guidelines set by Medicare.

Each plan shares costs a little differently. You need to carefully review the details of any plan you're interested in.

Cost sharing generally happens in four stages.

  • Stage 1: If your plan has a deductible, you pay the total cost of your drugs until you reach that deductible amount.
  • Stage 2 - Initial Coverage: You and the plan together share the total cost for your drugs up to an amount set by Medicare.
  • Stage 3 - Coverage Gap: You pay most of the cost for your drugs up to a limit set by Medicare. The plan pays very little. In 2017, you pay 51% of the cost for generic drugs, and 40% of the cost for brand-name drugs.
  • Stage 4 - Catastrophic Coverage: The plan pays most of the cost for your drugs through the rest of the year.

If you like, you can view Part D prescription drug plans offered by UnitedHealthcare now.

 

Understanding Drug Coverage Stages

If your plan has a deductible, you pay the total cost of your drugs until you reach the deductible amount set by your plan. Then you move to the initial coverage stage.

Stage 1 Initial coverage You share costs with the plan, usually as co-pays, until the combined total paid by you and the plan hits $3,700 (in 2017). Your share of this amount can vary by plan. Your premium payments do not count toward your share.
Stage 2 Coverage Gap ("donut hole") In 2017, you will pay 51% of the total cost for generic drugs    and about 40% of the total costs for brand–name drugs    until your yearly drug costs hit the 2017 out-of-pocket limit of $4,950. Your premium payments do not count toward this limit.
Stage 3 Catastrophic coverage You pay a small co-pay or co-insurance each time you fill a prescription until year's end. The plan pays the rest.

Here are some examples showing the savings that may be possible with a prescription drug plan. Remember, these amounts are for illustration only. Actual costs with specific plans may be different.

STORY SUMMARIES

Helen's story: Moderate prescription drug spending

Enrico's story: Heavy prescription drug spending

Helen

Helen, age 65, spends $80 a month for two drugs. She joins a Medicare Advantage plan with built-in drug coverage. There’s no additional premium for drug coverage with this plan. Because her spending is fairly low, she only reaches Stage 1, initial coverage. She still saves money with the plan.

Total annual drug costs without a Medicare Part D plan ($80 per month x 12 months)

$960

Annual premium for drug coverage with Medicare Advantage plan

$0

Stage 1 Initial coverage (Helen’s share during this stage)

$250

Stage 2 Coverage gap

$0

Stage 3 Catastrophic coverage

$0

Total Helen pays out-of-pocket for the year

$250

Total annual savings with Medicare Part D plan

$710*

*Costs shown are for illustration only. Your costs may be different.

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Enrico

Enrico, age 66, has several chronic conditions. Without coverage he spends $950 a month on drugs. He has Original Medicare (Part A and Part B), plus a standalone Medicare Part D drug plan with a $330 annual premium. Because his drug costs are high, he reaches Stage 3, catastrophic coverage.

Total annual drug costs without a Medicare Part D plan ($950 per month x 12 months)

$11,400

Annual premium for Part D drug plan ($27.50 per month x 12 months)

$330

Stage 1 Initial coverage (Enrico’s share during this stage)

$720

Stage 2 Coverage gap (Enrico’s additional cost-sharing up to the limit)

$4,030

Stage 3 Catastrophic coverage (Enrico’s share during this stage)

$236

Total Enrico pays out-of-pocket for the year

$5,316

Total annual savings with Medicare Part D plan

$6,084*

*Costs shown are for illustration only. Your costs may be different.

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