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nani · Wed Oct 26, 2005 10:24 pm What Are Your Options & Costs?

Medicare Rx Coverage

What Are Your Options & Costs?

Medicare Rx Drug Coverage Timetable

Medicare Home

Option #1: You may select a Medicare Part D plan (for prescription drugs) along with a traditional Medicare Part B plan (called "fee-for-service"). You’ll pay monthly premiums for both Part B and Part D. Sign up by May 15, 2006, to avoid the late enrollment premium penalty.

Option #2: You may select a Medicare Part C plan called Medicare Advantage that includes prescription drugs. These are managed care plans with bundled coverage for health-care professionals, hospitals and other services for one monthly premium. Your coverage for non-network providers and hospitals may be limited. Make sure you choose a plan that includes coverage for prescription drugs. Some plans may not. Sign up by May 15, 2006 to avoid the late enrollment premium penalty.

Option #3: You may do nothing if you have good prescription drug coverage from another source—such as a union, employer, retirement plan, or your spouse's employer. If your present coverage is equal to or better than Medicare's, it is called "creditable coverage" and you may safely stay with what you have. Expect a letter from your current insurer this fall telling you if your coverage is creditable. If you ever lose this coverage and apply later for Medicare Rx coverage, you will not be assessed a premium penalty.

Standard Costs

Benefits and costs in a standard Medicare prescription drug plan We're listing the average annual cost for stand-alone (Part D) drug coverage. Additional coverage can be obtained for higher premiums.

Premium: $384 per year ($32 per month)
Deductible: $250

Co-payments: After paying your $250 deductible, you will pay 25% of drug costs up to $2,250. You will pay 100% of drug costs from $2,250 - $5,100. When your total drug costs hit $5,100 and your out-of-pocket reaches $3,600, then you will only pay 5% of all drug costs through the end of 2006. This is referred to as "catastrophic coverage."

For people on high-cost drug therapies, the co-pay burden will be heaviest in the first few months of the calendar year until the out-of-pocket costs are met and catastrophic coverage kicks in. The deductible and out-of-pocket requirements start all over again each year.

Costs for Individuals with Low-Incomes
People eligible for Medicare who have limited assets and incomes at or below $14,355 for an individual or $19,245 for a couple who apply and are accepted for Medicare's "extra help" will pay less.

Premium: Sliding scale from $0 to $32 per person/per month
Deductible: $50

Co-payments: After paying your $50 deductible, you will pay 15% of drug costs up to $5,100 (your out-of-pocket $807). Then you will pay between $2 - $5 for every prescription through the end of 2006.

People eligible for Medicare and Medicaid ("dual eligibles") and people with incomes at or below $12,920 for an individual or $17,321 for a couple receive even more help.

Premium: $0
Deductible: $0

Co-payments: You will pay between $0 to $5 for each prescription.
There will be no co-pay at all after your total drug costs reach $5,100.

Get information on Financial Asssistance.