Medicare part D - premium payment and other costs

Medicare Part D Costs for 2010

Medicare private drug plan (Part D) costs will change again in 2010, and it is important to review your Medicare drug coverage to make sure that it will still cover the medications you need at a cost you can afford in the coming year. Knowing the new rates will help you avoid surprise charges that could keep you from getting the drugs you need.

Medicare’s Part D drug benefit is outpatient prescription drug coverage for anyone with Medicare. Unlike Medicare Parts A and B, which can be covered under Original Medicare, Part D is available only through private companies. If you have Original Medicare, you will choose a stand-alone prescription drug plan (PDP). If you have a Medicare private health plan (such as an HMO or PPO), you generally must get Part D drug coverage as part of your private health plan’s benefits package. Each Medicare prescription drug plan has its own list of covered drugs (formulary).
Part D plan costs change every year, and each private plan has different costs, so check with plans in your area to find out what you will pay this year. If you want to change your plan, remember that most people can change Medicare drug plans only during the Annual Coordinated Election Period, which runs from November 15 to December 31. Even if you are satisfied with your current plan, you should check if there is another plan in your area that offers better coverage at a lower price.

With most Part D plans you pay a monthly premium and part of the cost of each prescription (copayments or coinsurance) until total drug costs paid by you and the plan equal $2,830 (for most plans). Then you may have to pay the full cost of your drugs during the coverage gap, or “doughnut hole.” If you spend $4,550 in 2010 in out-of-pocket drug costs, you will then pay no more than 5 percent for each prescription (plus the premium). If your income is limited, you may be able to get Extra Help, the federal program that pays for most of the costs of Medicare drug coverage.

Part D is optional. If you have drug coverage now that is at least as good as or better than Medicare’s basic drug benefit, and you like it, you probably should keep it. The company that provides your drug benefits—such as an insurance company, employer or state program—should send you written notification once a year telling you whether your coverage is as good as or better than Medicare Part D (“creditable” coverage). If you do not have other coverage that is considered to be as good as Medicare drug coverage and you do not enroll when you are first eligible, you may have to pay a premium penalty when you do enroll. (You will not have to pay a premium penalty if you qualify for Extra Help, even if you enroll after you were first eligible).


2010 Medicare D costs Premiums
$31.94/month national average (Every plan has a different premium.)

Deductible
Up to $310 annually (Plans can choose to have a lower deductible.)

Coverage Gap Threshold
$2,830 (The amount that you and the plan must spend in total drug costs in most plans before you will hit the coverage gap.)

Catastrophic Coverage Limit
$4,550 (The amount of money that you must spend out-of-pocket before your drug costs go down significantly for the rest of the year.)