Varying Costs from Providers
Medicare Part D is offered through private insurance companies, but it is regulated by the federal government. This means that you do not have to worry about missing essential coverage—all Part D plans under the Affordable Care Act (ACA) meet the same basic standards.
However, because it is privately offered, prices can vary between companies. It is up to you to compare available options, or you can work with a talented insurance agent who will do the work for you.
The various price options, however, create healthy competition amongst providers. So, while this may appear more difficult on its surface, it will likely benefit you more in the long run.
The Cost of Prescriptions in the Plan
When you sign up for a Part D plan, it will cover a majority of the cost of your prescription. Some of it, however, based on the type and cost of the prescription itself. You will pay either a specific dollar amount known as a coinsurance fee, or a percentage of the total cost known as a copayment. The cost of these tiers will fall within these price ranges no matter the provider:
- Tier 1: $1 to $3 Coinsurance, Covers Preferred Generic Prescription Drugs
- Tier 2: $7 to $11 Coinsurance, Covers Generic Drugs
- Tier 3: $38 to $42 Coinsurance, Covers Preferred Brand Name Drugs
- Tier 4: 45% to 50% Copayment, Covers Non-Preferred Drugs
- Tier 5: 25% to 33% Copayment, Covers Specialty Drugs
Part D Costs Based on Income
You and/or your spouse’s income is another potential cost-determining factor. Specific plan premiums will still vary based on the provider, but, if you have a high enough income based on your tax return, you may have a small additional fee included with your premium. This, of course, will not apply to everyone, but it is important to consider if you believe you may fall under any of these income brackets:
- $88k (single) to $176k (joint) or less means that you will only pay the premium set by your provider.
- Between $88k-$111k (single) or $176k-$222k (joint) income will add a $12.30 fee to your premium.
- Between $111k-$138k (single) or $222k-$276k (joint) income will add a $31.80 fee to your premium.
- Between $138k-$165k (single) or $276k-$330k (joint) income will add a $51.20 fee to your premium.
Medicare Extra Help for Part D
Alternatively, you may have a lower income, and may be worried about how you can afford your Part D payments. If you receive Supplemental Security Income (SSI), you will more than likely qualify for the Medicare Extra Help program. Through this program most (if not all) of your Part D expenses will be covered.