What You Pay for Medicare Drug Coverage

The costs associated with Medicare drug coverage change depending on the prescription drug plan you sign up for and how it is organized. Your out of pocket costs will also be determined by your prescription drug usage and which drugs you use. One person may find that a Medicare prescription drug plan substantially lowers their medical costs while another person will find that the yearly premiums far exceed what they would ever spend on prescription medications. These choices are extremely individualistic and every person's circumstances are unique.

Circumstances that Directly Impact What You Pay for Drug Coverage

  • The prescriptions you use including generic/brand name
  • The plan you choose
  • Whether your drugs are on the plan's Formulary
  • How your drugs are ranked on the Formulary
  • Which Pharmacy you use
  • Whether you are required to use a network pharmacy or not
  • Whether you follow the plan's rules, like prequalification for prescriptions and Step Therapy
  • Whether you qualify for Extra Help or not
  • Whether you are a high-wage earner or not

Basic Costs You Can Expect to Pay With Medicare Drug Coverage

  • Monthly premiums. Monthly premiums are based on the plan and on your income. The base premium rate for 2011 is $32.34 a month. However, the amount for every plan will be different. High-wage earners will pay substantially more for their premiums. High wage earners are people who earn more than 107,000 a year for a single person and 170,000 for a couple. High wage earners add $12- $69.10 a month onto their plan's monthly premium.
  • Yearly deductible. Every plan has a different yearly deductible. The deductible is determined by adding up all the co-pays, co-insurance and out-of-pocket expenses for the year. The yearly deductible does not include premium amounts
  • Copayments and co-insurance payments. Co-payments and co-insurance amounts will vary depending on which plan you have. This is used to describe what you pay for the prescription after the insurance company pays its share.
  • The Coverage Gap can cost up to $4550 out-of-pocket each year.