Paying for Your Prescription Drug Plan

Although enrolling in a Medicare prescription drug plan will ultimately save you money, there are some costs involved that you should consider before choosing your plan. Various plans will, of course, charge different amounts depending on the type of coverage you require, but all plans have similar expense categories to consider.

A monthly fee, called a premium, is charged by most drug plans. The specific amount fluctuates according to the plan you choose and does not include premiums paid for Part B of your Medicare. Some drug plans, however, do not charge a premium.

A deductible, charged yearly, is what you yourself will need to pay before your drug plan covers your medications. While some plans don’t have deductibles, the ones that do vary, depending on the plan and the medications required.

A copayment or coinsurance is what you are charged for your prescriptions on top of the deductible, paid partly by you and partly by your plan. Sometimes, your premium covers this cost, up to a specific amount.

Finally, be aware of coverage gaps, when you will be required to pay for your own costs after your plan has used the required amount for covered medication. Even when you cover your own costs, you will need to pay your plan’s monthly premium. Many plans do offer coverage while in the coverage gap, but they might charge higher premiums or limit the brand or type of drugs available to you. Catastrophic coverage can also be used if your drug costs are exceedingly high. After you’ve paid no more than a specified amount for covered drugs within a year, you will only be charged a coinsurance or copayment for you’re the rest of those prescriptions.

To avoid additional costs, apply for your drug coverage when you are first eligible. If you wait, you may be charged a permanent late-enrollment penalty when you join. Contact your intended prescription drug plan for more information.