Medicare Part D Deductible

Mike Olmos by Mike Olmos | Licensed since 2010
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This article was updated on: 09/15/2018

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Do I need a Medicare Part D plan?

If you have Original Medicare (Part A and Part B) and want prescription drug coverage for prescription drugs you take at home, you will likely have to enroll in a separate prescription drug plan. Original Medicare generally only covers prescription drugs in limited circumstances, such as the prescription drugs you receive as a hospital inpatient or the prescription drugs administered to you in a doctor office. The good news is a stand-alone Medicare Part D Prescription Drug Plan may give you the coverage you need. Stand-alone Medicare Part D Prescription Drug Plans are available from private insurance companies and often come with out-of-pocket costs such as a monthly premium, annual deductible, copayments and coinsurance.

What is the Medicare deductible for a Medicare Part D plan?  

A Medicare deductible is the amount you must pay each year for your prescription drugs before your Medicare Part D Prescription Drug Plan begins to pay its share of your drugs that are covered. This is for a calendar year and resets every January 1. The amount of this deductible varies from Medicare Part D plan to Medicare Part D plan. However Medicare stipulates that no Medicare Part D Plan deductible can be greater than $405 a year in 2018.

If you had a covered prescription drug that cost $50 per month, the yearly cost would be $600. You could pay up to the first $405 and the plan might pay the remaining $195 if there was no coinsurance or copayment. If there is a coinsurance or a copayment, you would also pay a portion of the remaining $195. If you had a covered prescription drug that cost $200 per month, you could pay up to the first $405, and the plan might pay the remaining $1,995for the year if there was no coinsurance or copayment. If there is a coinsurance or a copayment, you would pay a portion of the remaining $1,995.

Some stand-alone Medicare Part D Prescription Drug Plans have deductibles less than $405 a year and some have no Medicare deductible at all.

How else do stand-alone Medicare Part D plans differ?

Unlike Medicare Part D deductibles, Medicare doesn’t set a dollar limit for Medicare Part D premiums. Your plan sets the amount for your monthly premium and Medicare may add an income-related monthly adjustment if your income is above $85,000. The monthly income adjustment is on a sliding scale. At the maximum income in the scale, an income above $160,000, you will pay $74.80a month in addition to your plan premium in 2018.

Copayment and coinsurance are other prescription drug plan costs that are determined by the private insurance company, not by Medicare, and may differ from plan to plan. Coinsurance is a percentage of costs of a prescription drug, such as 25%. Copayment is a set dollar amount, such as $10, for all prescription drugs in a certain tier.

All stand-alone Medicare Part D Prescription Drug Plans may not cover the same prescription drugs. To find out what prescription drugs your plan covers, ask for a copy of the plan formulary. Keep in mind that the formulary may change at any time but the plan must let you know when necessary.

If you have more questions about the Medicare Part D deductible or prescription drug coverage costs, I can help answer your questions. If you like, use the other links to request a phone appointment or an email from me. I’ll send you Medicare information tailored to your needs. To browse plans now, try the Compare Plans buttons on this page.

You must continue to pay your Medicare Part B premium.

Limitations, copayments, and restrictions may apply. Premiums and/or copayments/co-insurance may change on January 1 of each year.

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