When you only have Original Medicare, the out-of-pocket costs can be really high depending on your situation. If you think that having drug coverage may reduce the amount of money you have to per year, getting Medicare Part D, which is Medicare’s drug coverage plan, may be a good idea. In this article we will explain everything related to the costs of Medicare Part D so you can decide if it fits what you need.
What do I have to pay if I join Medicare Part D?
If you decide to get Medicare drug coverage, you will have to pay throughout the year a monthly premium, a yearly deductible, copayments or coinsurance and costs in the coverage gap. In addition you may have to pay costs if you get Extra Help and/or costs if you pay a late enrollment penalty.
How much is my monthly premium?
The cost of your monthly premium will depend on the plan you choose. However, you may have to pay an extra amount, which will depend on your income and it is a standard amount.
Just like Medicare Part B, if your modified adjusted gross income is above a certain amount, you may pay a Part D income-related monthly adjustment amount (Part D-IRMAA). This is additional to your monthly plan premium and it is paid directly to Medicare. The Part D-IRMAA goes from $13.00 to $74.80. Contact Medicare if you want to know if you have to pay it and how much it is.
Do you have other questions? Visit www.medicaresupplementplans2019.com A Medicare Supplement plan may be for you.
How much is the yearly deductible?
The cost of your yearly deductible will depend on the plan you chose, but in 2018, no Medicare drug plan may have a deductible more than $405. The year deductible is something you have to pay before your Medicare drug plan pays its share.
Take into consideration that not all Medicare drug plans have a yearly deductible, so this could be helpful when comparing Costs of Medicare Part D plans.
How much are copayments or coinsurance?
Medicare Prescription Drug Plans have different “tiers” of copayments or coinsurance, in which different types of drugs are classified depending if they are cheaper or more expensive. This means that, for example, if you get generic drugs, your copayment will be lower than if you get brand-name drugs.
Remember that with copayments you are only paying a small percentage of drug costs and your plan pays the rest.
What is the coverage gap and catastrophic coverage? How much are they?
The Coverage Gap starts after you and your drug plan spent a certain amount ($3,750 in 2018) for covered drugs. Once you reach the Coverage Gap, you will pay no more than 35% of the plan’s cost for covered brand-name prescription drugs and 44% for covered generic drugs. These discounts may be higher depending on your plan and certain conditions may apply, so contact your insurance to know more about the specific plan you have.
In case you spend $5000 (2018 amount) out-of-pocket, you are out of the coverage gap and you automatically get “Catastrophic Coverage”, which means you will pay a small coinsurance for covered drugs the rest of the year.
How do I know if I have to pay a Part D late enrollment penalty and how much is it?
If you go without a Medicare Prescription Drug Plan for any continuous period of 63 days or more after your Initial Enrollment Period is over, you will have to pay a Part D late enrollment penalty that will be permanently part of your Costs of Medicare Part D.
The penalty is calculated by multiplying 1% of the “national base beneficiary premium” ($35.02 in 2018) times the number of full, uncovered months you didn’t have Medicare Part D. You have to pay your penalty monthly and every year it will be adjusted depending on the national base beneficiary premium.