Medicare Part D Cost

Generally, Part D plans are either purchased in addition to traditional government-run Medicare (Part A and/or Part B) or as part of a Medicare Advantage (Part C) policy from a private insurance company. For an overview of all these options, see How Much Does Medicare Cost.

Typical costs:

• The two basic expenses for Medicare Part D are the monthly premium and the cost of buying prescription medications under each plan. The specific drugs covered vary from one plan to another, or even from year to year under the same plan, which means premium costs will vary depending on which drugs are covered.
• The average monthly premium for a Medicare Part D Prescription Drug Plan in 2014 is $31, or $372 a year, according to the Department of Health and Human Services[1] . However, premiums can cost zero to more than $100 a month and not all plans are offered in all areas. The Kaiser Family Foundation provides an overview of the 2014 Medicare Part D plans[2] .
• Each year the government sets the minimum coverage an insurance company is allowed to offer; in 2014 this is a maximum $310 deductible, an initial coverage limit of $2,850 and an out-of-pocket threshold of $4,550. The individual pays up to the deductible amount; the Part D plan pays 75% of costs up to the initial coverage limit. The gap between the initial coverage limit and the out-of-pocket threshold is known as the "doughnut hole." Once this gap has been reached, brand-name drugs are discounted 50% by the manufacturer, the Part D plan pays 2.5% and the person pays the remaining 47.5%. For generic drugs, the Part D plans pay 28% of the cost and the individual pays 72%, until the total amount spent on prescriptions exceeds the out-of-pocket threshold. Anything above that amount is considered catastrophic coverage, and the individual pays 5% of the total prescription cost. All Medicare prescription drug coverage must be at least as good as this minimum standard. Some policies may lower or eliminate the deductible; others might reduce or eliminate the "doughnut hole" coverage gap.

• Medicare drug plans cover both generic and brand name drugs. However, each plan has its own formulary -- a list of prescription medicines covered under the plan. A formulary must meet Medicare's minimum requirements, but does not have to cover all prescription medications. Most formularies do not include medicines not approved by the FDA, fertility drugs or medications for weight loss or gain. The Medicare Formulary Finder[3] searches by zip code or an individual's Medicare information (name, number, etc.) for local plans that cover specific drugs.

• Subsidies are available from Medicare so that low-income seniors pay no premiums or deductibles for their Part D Prescription Drug plans; medicare.gov offers a brochure[4] on applying for help paying for prescription drugs.

• To choose the best Medicare Prescription Drug plan, make a list of all medications taken, how much the individual is currently paying for them and at which pharmacies. Use the Medicare Plan Finder[5] to enter the drug names and search for details on the Part D Prescription Drug plans available locally. The Medicare Rights Center lists questions to consider[6] when choosing a Medicare Part D Prescription Drug Plan.
• The initial open enrollment period for Medicare Part D is the month of the person's 65th birthday, plus three months before and three months after.
• To change Medicare prescription drug plans, the annual open enrollment period[7] is Oct. 15 to Dec. 7.
• If a person is covered under the original government-run Medicare (Part A and Part B), signing up for some Part D prescription drug plans could trigger an automatic switch to a private Medicare Advantage (Part C) plan. Before choosing, ask if a Part D plan works with Medicare Part A and B, or is connected to a Medicare Advantage plan.
• It's not mandatory to take Part D Prescription Drug coverage when first eligible for Medicare. However, if Part D coverage is added later the premiums will be higher unless there is proof that during the period when Part D coverage was waived the individual had other prescription drug coverage (i.e. under a spouse's health insurance) that was at least as good as Medicare Part D.

1.  www.hhs.gov/news/press/2013pres/07/20130730c.html
2.  kff.org/medicare/issue-brief/medicare-part-d-a-first-look-at-plan-offerings-in-2014/
3.  //www.medicare.gov/find-a-plan/questions/home.aspx
4.  www.medicare.gov/Library/PDFNavigation/PDFInterim.asp?Language=English&Type=Pub&Pu...
5.  //www.medicare.gov/find-a-plan/questions/home.aspx
6.  www.medicareinteractive.org/page2.php?topic=counselor&page=script&slide_id=1204#top
7.  www.medicareinteractive.org/page2.php?topic=counselor&page=script&slide_id=1204#top

Check Out All Costs for Personal Finance		How Much Do Funeral Flowers Cost?		How Much Do Tax Returns Cost?		How Much Does Closing a Home Cost?

Today's Featured Cost Articles

Make sure your gutters are clean before they start to fill up again this fall. Are you planning a Labor Day picnic? Need a new charcoal grill? Pruning trees before the storm season can help ensure dead branches won't imperil your home. Looking for help to take care of your garden? How much does garden service cost. The late August sun can leave a mark. Check out sunburn treatment options.

About CostHelper

CostHelper is based in Silicon Valley and provides consumers with unbiased price information about thousands of goods and services. Our writers are experienced journalists who adhere to our strict editorial ethics policy.

CostHelper Community

UTI urgent care visit Paid: 147.00 Visit was $135. Antibiotics was $12. Waiting for four hours in the waiting room and the visit was quick... [more] -nervouschomper Urinary Tract Infection Treatment Cost Spanish Medical Interpreter Paid: 150.00 I worked with SynShyne Services out of Monroe, NC. They were so worth the price! Professional, friendly, accurate, great attitude and always on time. I recieved an itemized report after every contact and a user friendly invoice weekly... [more] -Gregory Richardson Interpreter Cost Dat Paid: 495.00 This is how much I am paying... [more] -Calista Christian Dental Admission Test Cost Shingrix Paid: 48.00 ... [more] -Not that BB Shingles Vaccine Cost Skin prick allergy test Paid: 573.00 Took my 9 yr. old in after an allergic reaction to eggs. Several panels for nuts, fish & top 8 allergens. Sure enough, egg came up. Got a script for epinephrine and left... [more] -D’s mom Allergy Testing Cost Estimate for Teeth Cleaning Cat Paid: 0.00 13 year old cat …teeth extractions, X-rays, blood work, anesthetic, cleaning estimate 2 to 3 thousand... [more] -Terrimarie Cat Teeth Cleaning Cost