WHAT DOES IT COST?

• Stand-Alone Part D Prescription Drug Plan monthly premiums range from $0 – $100+. Your premium may be higher based on your income similar to the Medicare Part B premium. To see the Part D income-based premium chart click here.

• Some Part D plans are included in the monthly premium of a Part C Medicare Advantage Prescription Drug (MAPD) plan.

• Deductible – some plans charge the annual Medicare Part D deductible that you must meet before the insurance company shares in the cost of your Rx’s.

• Cost-sharing = Co-payments and co-insurance that you must pay for your prescriptions.

 

HOW ARE PRESCRIPTIONS COVERED?

Prescription drugs are classified and listed in a formulary as:

• Tier 1 = Preferred Generic Drugs

• Tier 2 = Non-Preferred Generic

• Tier 3 = Preferred Brand Drugs

• Tier 4 = Non-Preferred Brand Drugs

• Tier 5 = Specialty Tier Drugs

Plans may have different coverage/tiers for drugs.

 

Your co-payment or co-insurance is going to depend on the tier of your specific medications and the coverage phase that you are on.

 

PART D BENEFIT PHASES

1. Deductible phase = $590 in 2025

2. Initial coverage phase = (you + insurance company) cost-share adds the cost of your prescriptions to $2,000.

3. Catastrophic phase = you pay $0 in 2025

 

Once you enter the coverage gap, you may receive a 70% manufacturer discount on certain covered brand-name drugs. Although you’ll only pay 25% of the price for that brand-name drug, the entire price will count as your TROOP (True-Out-Of-Pocket) spending towards the $7,050 that you must reach in out-of-pocket expenses during the coverage gap phase.

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EXAMPLE

 

Mrs. Anderson reaches the coverage gap in her Medicare drug plan. She goes to her pharmacy to fill a prescription for a covered brand-name drug. The price for the drug is $60, and there's a $2 dispensing fee that gets added to the cost, making the total price $62. Mrs. Anderson pays 25% of the total cost ($62 x .25 = $15.50). 

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The amount Mrs. Anderson pays ($15.50) plus the manufacturer discount payment of $42 ($60 x .70 = $42) count as out-of-pocket spending. So, $57.50 counts as out-of-pocket spending and helps Mrs. Anderson get out of the coverage gap. The remaining $4.50, which is 5% of the drug cost ($3) and 75% of the dispensing fee ($1.50) paid by the drug plan, doesn't count toward Mrs. Anderson's out-of-pocket spending.