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More Resources: FAQs About Your Plan

Question 2: How much will I have to pay for my prescriptions?

Read your benefit explanation and understand your coverage. Medicare benefits levels are complicated. Many PDP's follow a similar model, called the "standard benefit." Unless you are a low income person getting extra benefits, then there are two periods of time when a standard PDP may not pay for your covered prescriptions:

• First, you may have a deductible at the beginning of each year of up to $265. You will have to pay for your covered medications yourself until you have spent this deductible amount of up to $265. Medicare encourages the PDP to give you a discount on the cost of each prescription, but you may be getting the benefit of discounts through lower premiums or cost sharing. Some plans have used discounts to eliminate the deductible.
• Then, for a while, the PDP will pay for most of your medication costs for covered drugs, but you will have to pay a co-pay on most medications.
• After the PDP has paid for about $1500 worth of your covered medicines that year, it will stop paying again. This is like a second deductible period (nicknamed the "donut hole"). If you need to get any more medicines during this period, you will have to pay for them yourself. Again, Medicare encourages the PDP to give you a discount on these medicines just like during the deductible period at the beginning of the year, but in a standard plan you will pay the entire discounted price yourself. Some plans have chosen not to follow the "standard benefit" model and offer some coverage during the donut hole, such as coverage for generics.
• Once you have paid about $4050 yourself for covered prescription medicines, then the PDP will start paying again for any other covered prescriptions you fill that year, but you will pay a much lower co-payment. This is called the catastrophic benefit period. Tell me more about the out-of-pocket threshold for catastrophic benefits.

This process starts over each year, so if you don’t use more than about $2510 of medicines each year, you will only have to pay the first $265 and then your co-pays after that.

Find out about the co-payments. All PDPs will require you to pay some level of co-payment for each prescription. A few PDPs may have just one co-pay amount, for example $10.00, for any prescription. But many PDPs have different levels of co-payments (known as tiered co-pays) for different medicines. If the PDP you are considering has tiers, you should find out which of your medicines are in each tier and what the co-pay amount is for each tier. Note that the PDPs can move your medication from one tier to another at any time. If the amount you will have to pay is more than you can afford because your medication is in the highest tier, you may want to ask your health care provider if there are other medications on a lower tier that are appropriate for you. Also, you may be able to seek a coverage determination for a lower copay amount if the only medication that works for you is in the higher tier. The amount you will have to pay may also be different depending on whether you get your prescription filled at a preferred pharmacy in the plan's network, a non-preferred pharmacy in the plan's network, a pharmacy that is not in the network, or a mail order pharmacy.

If you have other discount cards, ask how much the drug would cost if you used one of them instead of using your Medicare card. Medicare drug plans may not charge you a price that is higher than the pharmacy's price for the medicine if you bought it without insurance. During the deductible and coverage gap periods, you may be able to save money by using other types of discount cards. As long as the medicine you get is covered by your plan, and you buy it from a pharmacy that is in the plan's network, you can send a copy of the receipt to your plan and ask to have it counted toward your out-of-pocket limit that determines when you enter and exit the coverage gap. Learn more about the coverage gap.