Premiums for Medicare Prescription Drug Plans and Medicare Advantage Plans may rise over the course of your coverage to meet the costs of inflation. The cost of providing medical care increases every year, and many providers raise the premium payments to compensate for these increases. However, the amount and frequency of the increase can vary from one Medicare Part D provider to another and from one policy to another.
Medicare Part D prescription drug coverage can be obtained through a Medicare Prescription Drug Plan, or PDP. PDPs cover part of the cost of medications that are not covered under Medicare Part A or B. You may purchase a PDP in combination with original Medicare or with a Medicare Advantage plan, which encompasses your Part A and Part B benefits. Before you purchase a PDP or Advantage policy, ask your insurance provider whether you should expect yearly premium increases and if Medicare Part D saves money.
Factors that Affect Premiums
Several factors affect the cost of Medicare Part D prescription drug plans. Your income plays an important role in determining the cost of your policy. If your income exceeds a certain threshold, you may pay higher premiums for prescription drug coverage. Medicare Part D premiums may increase as a result of legislative changes. However, the amount of the increase and the effect on your premiums may depend on the type of policy you have and your insurance provider.
The type of policy you choose and the extent of your coverage will affect your Medicare Part D premiums. Medicare Part D plans vary in the number of medications they cover. They may also vary in the dosage and frequency that you may take. In general, the more extensive the benefits you receive, the higher the cost of your policy will be.
The pricing structure of your policy will determine how much you must pay out of pocket for prescription drug coverage. Most Medicare Part D and Medicare Advantage plans require a premium, a deductible and co-payments on the costs of medications. The higher your deductible or co-payments, the lower your premiums are likely to be.
Planning for the Cost of Coverage
Once you reach the age of 65, you become eligible for Medicare benefits. Original Medicare includes Part A, or hospital insurance, and Part B, which covers outpatient services. Part D is a relatively new addition that covers part of the cost of therapeutic drugs. Most of your hospital benefits under Part A are covered through the Medicare contributions that you make through your taxes. Part B coverage is shared between you and the federal government, which means that you must pay premiums for these outpatient services.
Premiums for Part B may increase each year to reflect the effects of inflation and the rising costs of medical care. However, if you have a Medicare PDP to cover your prescriptions, increases in your Part B premiums will not necessarily coincide with increases in your PDP premiums. Premiums for Medicare Advantage plans may increase over time; however, you must verify these increases with your insurance provider.
Medicare Advantage plans are administered through private insurance companies, which may raise Medicare Part D premiums annually to reflect the age of the policy holder, changes in the economy or changes in legislation. Premium increases may also depend on the area of the country where you live. As you plan for the cost of your medical coverage, take these potential increases into account, as well as the timing of your enrollment. You may pay higher premiums for Medicare Part D prescription plans if you miss your open enrollment period.
