Understand Your Medicare Drug Coverage Costs

Are you thinking of getting Medicare Part D prescription drug coverage? Because it’s not included in Original Medicare, you may be wondering how to get it — and what it might cost.

What Costs to Expect With Medicare Prescription Drug Coverage

There are two main ways to enhance your health benefits with a Medicare prescription drug plan, which are available from private insurance companies:

1. Sign up for Original Medicare (Parts A and B) and add a prescription drug plan (PDP), known as  Medicare Part D
2. Get your Medicare benefits through a Medicare Advantage plan (Part C) that includes Medicare Part D prescription drug benefits, known as an MA-PD

In either case, your Medicare drug costs can include monthly payments, deductibles, and copayments or coinsurance for each prescription. Let’s look at each of these in detail.

How Much Does Medicare Cost With Drug Coverage.

You will have a Medicare premium, or monthly fee, for most Part D plans (PDPs) or Medicare Advantage plans that include prescription drug benefits. The amount is set by the company that provides your plan, so be sure you find out what the monthly payment they charge is before you sign up.

Typically, you’ll receive a bill directly from the private company. Or you can contact them and arrange to have the monthly payment deducted straight from your Social Security check.

What Does Medicare Cost? Most PDPs Have Annual Deductibles.

A Medicare Part D deductible is the amount you must pay out of pocket each year before your drug plan begins to pay its share of your covered drugs. Some drug plans don’t have a deductible, which means you may find their premium is a little higher. A couple more things to note:

• Limits apply to yearly deductibles. For 2017, the Part D deductible cannot exceed $400.
• If you qualify for the federal Extra Help program, you may not have to pay the full deductible.

What Are Other Medicare Costs?

After the deductible, if you have one, you will need to pay a portion of the costs for your prescriptions, as either a copayment or coinsurance. A copayment is a set amount, such as $5 for any generic drug. Coinsurance is your percentage of the drug’s costs; for example, your plan might pay 90% of the cost while you pay 10%.

The specific amount you must pay per prescription varies depending upon your plan and:

• Whether your prescriptions are on your plan’s list of covered medications (also called a formulary).
• Which “tier” your covered drug is assigned to. Generic drugs typically costing less than brand name and specialty drugs.Enrolling in a Medicare Advantage Plan (Part C), with or without prescription drug coverage.
• Which pharmacy you use, including whether it offers preferred or standard cost sharing, is out-of-network, or is a mail order service.
• Whether you qualify for the Extra Help program to pay your Part D costs.

Coverage Gap Costs

Most Medicare prescription drug plans also have something called a coverage gap, which you may have heard called the “donut hole.” It’s an annual limit on benefits that kicks in after you reach a certain amount you and your plan have spent together on covered drugs. Here’s what you should know:

• You might not enter this gap if your drug costs aren’t high enough.
• If you do hit the limit ($3,700 in 2017), you might have to pay the whole cost of your medications for the rest of the year, usually at a discounted amount.
• For 2017, those amounts are 40% of the plan’s cost for covered brand name drugs and 51% of the plan’s cost for covered generic drugs.
• If your spending reaches the end of the gap ($4,950 out of pocket in 2017), you get what is called “catastrophic coverage,” which begins paying up to 95% of covered drugs again for the rest of the year.
• Some plans provide extra coverage or cost sharing reductions when you’re in the gap, but may charge a higher premium each month.

Keep in mind, each Part D plan is different and your Medicare drug coverage may change on January 1st of each year. So you may want to compare your plan’s monthly payment, deductible, copayments or coinsurance to other plans on an annual basis.

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A CONSUMER’S GUIDE TO HEALTH INSURANCE FOR PEOPLE ELIGIBLE FOR MEDICARE MAY BE OBTAINED FROM YOUR LOCAL SOCIAL SECURITY OFFICE OR FROM THIS INSURER

Empire BlueCross BlueShield is an HMO plan with a Medicare contract. Enrollment in Empire BlueCross BlueShield depends on contract renewal. Services provided by Empire HealthChoice HMO, Inc. licensee of the Blue Cross and Blue Shield Association, an association of independent Blue Cross and Blue Shield plans.

Services provided by Empire HealthChoice Assurance, Inc., licensee of the Blue Cross and Blue Shield Association, an association of independent Blue Cross and Blue Shield plans. The Blue Cross and Blue Shield names and symbols are registered marks of the Blue Cross and Blue Shield Association.

This information is not a complete description of benefits. Contact the plan for more information. Limitations, copayments, and restrictions may apply. Benefits, premiums and/or co-payments/co-insurance may change on January 1 of each year. You must continue to pay your Medicare Part B premium.

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