How Much Does Part D Cost?
If you get a Medicare Part D Prescription Drug Plan then your monthly premium is based on your income.
Each Insurance Company sets their own base price for their plans which is referred to as the "Plan Premium" in the picture below. You will have to pay the "Plan Premium" plus any additional charges based on your income as shown below.
They always refer to your taxable income from 2 years prior to determine if you have to pay extra. Example: In the year 2023 they will base it on your taxable income from 2021.
Part D Medicare is sometimes referred to as "Prescription Drug Coverage" or "PDP"
Medicare Part D Benefits and Costs
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Avoid Late Enrollment Penalties
If you do not properly enroll in Medicare Part D when you are supposed to enroll then you may incur a financial penalty... and that Penalty is a LIFETIME penalty.
Make sure you properly enroll at the appropriate time to avoid any financial penalties.
How Do The Part D Stages Work?
How much you actually pay for a Medication is based on what stage you are in, which is based on how much you pay out of pocket (not based on what the plan pays for you.
You'll notice in the graph below that you will start each year in the Annual Deductible Stage. In 2023, after you have paid $505 out of pocket, then you will move to the Initial Coverage Stage.
In the Initial Coverage Phase, your medication co-pays and Co-insurance is based on the what the insurance company charges according to the plan you buy... this is why it's important to get help from us to ensure you save the most amount of money possible.
Once you spend $4,660 our of pocket then you will enter the Coverage Gap, which was formally known as the "donut hole". In this stage you will pay 25% out of pocket until you pay a total of $7,400.
The final stage is called Catastrophic coverage. If you reach this stage then you will pay either $4.15 for generic medications or $10.35 for Brand name medications, or 5%... whichever is greater.
How Do The Insurance Companies determine the cost of each medication?
Medications are put into what they call a "formulary". The formulary is a document that each insurance company will publish, and inside the formulary they will list each mediation that is covered.
The formulary wil list each covered medication and they will assign a "tier". Usually their are 5 tiers of covered medications, and each tier will ultimately determine how much the total cost of the medication is.
The lower tier that your medication is assigned, the less you will have to pay out of pocket for that Medication.
Pay close attention to how your drug plan formulary lists your mediation on the tier... as that is the primary factor for what you will pay out of pocket.
If your Medication is not listed in the insurance companies formulary, then that means they do not cover your medication and you have to pay for the full cost... ouch.
We can help you get a "formulary exception" so that your medication gets covered even if it's not listed in the insurance companies formulary.