When you get older, you’ll be eligible to enroll in Medicare, the U.S. government’s comprehensive health insurance plan that covers both hospital and outpatient care and supplemental benefits like prescription drug coverage.
But with so many plans to choose from and many Medicare prescription drug options within each plan, how do you know which one will be the best fit?
Before you decide on your next plan, look at these three factors that affect Medicare prescription drug plans.
Premiums payable are based on your income, so if you are an individual or part of a couple who makes $85,000 per year or less, you will pay premiums ranging from $0 to $254. All plans rolled out in 2017 were required to include information about how much deductibles and premiums payable they charged and their formulary (which medications are covered). With this information readily available on each plan’s page, it’s easy to compare costs and coverage before choosing one option. You can also consult an accomplished and vetted Medical Insurance Broker to get the best from your Medicare Insurance policy.
Deductibles are portions of costs paid by a person before their insurance kicks in. Often, people think deductibles are charged per prescription, but that’s not always true. There can be different deductibles for drugs and medical services. For example, if you take ten medications a month and have a $500 deductible for drugs, your plan may require you to pay $500 out of pocket before it starts paying anything toward your medications.
It will then cover at least half of each prescription fill until you reach $1,000 in total costs—your maximum out-of-pocket cost for medications (or more if there is also a limit on how much of your annual expenses it covers). However, there might be no deductible if you have one filling service per month.
One of Medicare’s main features is copay options. However, you want to make sure that you’re not giving up too much access to prescription drugs when selecting a plan based on cost alone. Remember, insurance companies will cover a percentage of your prescription costs, but if your medicine exceeds what is covered in your plan, you could be on the hook for paying all of it on your own. For example, let’s say you have a medication that costs $100 per month, and your plan has a $50 copay option.
This means you would pay $50 each month towards your medication, and your insurance company would pay $50 as well. But let’s say one month, there was a price increase, and now that same medication costs $150 per month. If you selected a plan with a $50 copay option, you would pay $100 out of pocket for that month.
Conclusion: When choosing a Medicare Prescription drug plan, it’s essential to know how premiums, copays and deductibles vary from plan to plan. Even if you get rebates for certain medications, you may still have to pay a portion of that cost out-of-pocket. On top of that, your health condition and other factors will affect which plans are best for you and your budget.