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 2016, you pay 58% of the cost for generic drugs, and 45% 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 $3,310 (in 2016). 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 2016, you will pay 58% of the total cost for generic drugs and about 45% of the total costs for brand–name drugs until your yearly drug costs hit the 2016 out-of-pocket limit of $4,850. 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.
Helen's story: Moderate prescription drug spending
Enrico's story: Heavy prescription drug spending