Understanding Medicare Advantage Part D Costs

Medicare Advantage (MA) plans offer an alternative to Original Medicare. These plans often include Part D prescription drug coverage. However, understanding the costs involved can be confusing. Here’s a breakdown of key terms and how to potentially lower your expenses.

Key Terms

  • Deductible: the amount you pay for care each year before your plan begins to pay and coinsurance kicks in.
  • Coinsurance: is the percentage of a covered health care service that a patient pays after meeting their deductible. It’s usually expressed as a percentage, such as 25%
  • Copayment: A flat fee you may pay for each prescription or service
  • Cost-share: The total amount of money a patient pays for health care services, including deductibles, copayments, and coinsurance.
  • Out-of-pocket Maximum: the most you will pay for covered services each year.

Medicare Advantage Part D Costs

The specific costs for your Medicare Advantage Part D plan will vary based on several factors, including:

  • The plan you choose: Different plans have different coverage and cost structures.
  • The drugs you need: The tier of a drug (generic, preferred brand, non-preferred brand) affects your cost.
  • Your income: Lower-income individuals may qualify for Extra Help with prescription drug costs.

How Coinsurance Works in Medicare Advantage Part D

You may enter the coinsurance phase once you meet your plan’s deductible. This means you’ll pay a percentage of the drug cost, (coinsurance), while the plan covers the remaining cost. 

Here’s an example of how coinsurance costs work:

John’s health plan has 75/25 coinsurance. This means that after John has met his deductible, his plan pays 75% of covered costs, and John pays the remaining 25%.

Scenario:

  • Your Part D plan has a $400 deductible and a 25% coinsurance
  • You spend $400 on prescriptions, so you met your deductible 
  • Your next prescription is $100
  • You pay 25% of $100, which is $25 or your share of the cost
  • The plan pays 75% of $100, which is $75 the plan’s share of the cost

Lowering Your Costs

Several strategies can help you reduce your Medicare Advantage Part D costs:

  1. Enroll in Extra Help: If your income is low enough, you may qualify for Extra Help from Medicare. This program can significantly reduce prescription drug costs, eliminating the coverage gap.
  2. Compare Plans Annually: Plan costs and formularies change each year. Compare plans during the Annual Enrollment Period (October 15 to December 7) to find the best option.
  3. Use Generic Drugs: Generic drugs are typically less expensive than brand-name drugs.
  4. Take Advantage of Mail-Order Pharmacy Options: Many plans offer lower costs for mail-order prescriptions.
  5. Explore Manufacturer Coupons and Patient Assistance Programs: Some drug manufacturers offer coupons or patient assistance programs to help reduce costs.

Other Potential Assistance

You may be eligible for additional assistance programs depending on your state and circumstances. These programs can help with prescription drug costs and other health care expenses.

  • State Medicaid Programs: Some states offer Medicaid programs that can help low-income individuals with prescription drug costs. Visit the Medicaid & New York page for the latest information and programs.
  • State Pharmaceutical Assistance Programs (PAPs): Many states have programs to help seniors with prescription drug costs. State Pharmaceutical Assistance Programs
  • Local Assistance Programs: Some communities offer assistance with prescription drug costs.

Important Note: It’s crucial to review your specific Medicare Advantage Part D plan documents and consult with a health care professional or Medicare counselor to fully understand your coverage and costs.