Medicare Part D Cost

Medicare Part D cost can seem prohibitive for seniors on fixed incomes, but there are various plan options and assistance programs to make a prescription drug plan affordable for all Medicare beneficiaries. Senior citizens spend thousands of dollars each year on their prescriptions. Without insurance, prescribed regimens would be far too expensive to maintain. The Medicare Part D cost is well worth the savings on out-of-pocket expenses for pharmaceuticals.

Like any insurance plan, Part D coverage requires an initial investment and certain out-of-pocket requirements to receive benefits. Prescription drug plans are established through Medicare-approved private insurance companies. The premiums, deductibles, and co-pays vary depending on the plan, but the costs are far less than market value for prescription drugs. Medicare Part D can make the difference between affording your drugs and having to go without.

What You Pay

The Medicare Part D cost to you includes a monthly premium, annual deductible and a co-pay or co-insurance on each prescription filled. Premiums and co-pays vary from plan to plan. Each plan has a different formulary, a list of the drugs it covers. It is important to compare plans to find one that covers all of your prescriptions for a premium you can afford.

In addition to the differences in premiums between plans, the same drug may fall on different co-pay tiers from plan to plan. This means you could be paying more out-of-pocket than necessary. Careful comparison shopping for the lowest Medicare Part D cost can yield significant savings.

Each plan has a different premium, but the Kaiser Family Foundation estimates the average monthly cost to be $40.72. [1] Some plans have no deductible--the trade-off being a higher premium--but most plans have an average deductible of $310. This is the annual amount you must pay for your prescriptions before coverage kicks in.

Each time you have a prescription filled, you may have to pay a flat fee, called a co-pay, or a percentage of the cost, called co-insurance. Again, these differ from plan to plan. Low-income beneficiaries receiving prescription drug assistance from Social Security, Medicaid, Medigap or a private or state pharmaceutical assistance program may have no co-pay or a significantly reduced co-pay.

The annual out-of-pocket Medicare Part D cost comes to about $800, not including co-pay and co-insurance costs. People who take many prescriptions or very expensive drugs will pay significantly more when the co-pays are added up. A controversial aspect of Medicare Part D is the Donut Hole, a coverage gap that requires some beneficiaries to pay for their drugs out-of-pocket.

Once the total Medicare Part D cost of drugs--including the deductible, the co-pay/co-insurance and what the plan pays--reaches a certain limit, usually $2,840, the plan stops paying its share. The beneficiary is responsible for the total cost of drugs, though they receive a 50 percent discount for most brand name drugs and a 7 percent discount for generics. Once the beneficiary has met the out-of-pocket limit, usually $4,550, Medicare Part D begins to pay again, providing what is called "catastrophic coverage." The plan then pays around 95 percent of the cost of drugs, leaving the beneficiary with only a small co-pay.

Surviving the Coverage Gap

Reaching the Donut Hole can be a very scary time for seniors on fixed incomes. The cost of prescription drugs is very high, and many people are forced to go off their regimens when they can no longer afford their medication. This can lead to worse health problems down the road, so it is crucial to take measures to get through the gap while staying on your prescribed medications.

The first step is switching to generics. These are a fraction of the price of brand names, and they tend to be just as effective. Ask your doctor to write your prescriptions for generics to save during the gap.

Another option is applying for assistance. Seniors who meet income and resource requirements that show a need for financial assistance can get reduced prices and even have their prescriptions paid in full. There are many groups that can help defray the Medicare Part D cost during the gap.

Look to pharmaceutical companies' assistance programs for reduced prices. The states also have these assistance programs. Other government subsidies can work in cooperation with Medicare Part D, like Social Security prescription drug plans, various Medicaid programs and Medigap. Most of these programs have a maximum income requirement, so low-income seniors are usually eligible.

Prescription drug plans significantly reduce the cost to seniors for their medications, but they do require some out-of-pocket payment. Medicare Part D cost should not be a hindrance to staying on a doctor-prescribed health care regimen. Carefully comparison shop for the least expensive Medicare Part D plan available, talk to your doctor about prescribing generics and look into assistance programs to make Medicare Part D cost more affordable.

http://www.webmd.com/medicare/medicare-part-d-prescription-drug-plans Retrieved 2011-09-02

Free Prescription Plan Quotes