Medicare Part D Costs
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Medicare Part D covers outpatient prescription drugs — the kind that are prescribed by a doctor and used by you at home. You can receive this coverage by enrolling in a stand-alone Part D drug plan (if you have traditional Medicare for your medical benefits) or in a Medicare Advantage plan that combines medical and Part D drug coverage in its benefit package.
All stand-alone Part D plans charge monthly premiums. The amounts vary among plans, ranging from $15 to more than $100 a month in 2013, with most charging $35 to $50 a month. Most Medicare Advantage plans combine both health and drug services under one premium, but some charge no premiums at all. Both types of plans can change their premiums every calendar year.
You can’t be charged more than a certain amount in any one year for the annual Part D deductible, whether you’re enrolled in a stand-alone plan or a Medicare Advantage plan. In 2013, the maximum deductible is $325 ($310 in 2014). But many plans charge lower amounts or, in some cases, nothing at all.
Two factors determine your Part D co-pays:
The amount your plan charges for each specific drug you take: Flat dollar co-pays stay the same all year, but those that are percentages of the cost of the drug can fluctuate throughout the year as the full price goes up or down.
Which phase of coverage applies to you in Part D’s annual cycle: Are you in the deductible, initial coverage, doughnut hole, or catastrophic coverage phase when you fill prescriptions at different times of the year?
Part D plans can change the co-pays they charge for each drug every calendar year. And co-pays vary widely among different plans, even for the same drug. Both of these issues are good reasons to carefully compare plans each year to ensure you get the best deal.
Part D doesn’t place a flat cap on your drug expenses in any one year, but you do get some relief if your costs rise over a certain level during the year.
When that happens, catastrophic coverage kicks in, meaning that your drugs cost far less — no more than 5 percent of the full cost — until the end of the calendar year. However, to qualify for catastrophic coverage, you must spend quite a bit out of pocket.