Even if you have a Medicare prescription drug plan, also known as a Part D plan or PDP, you still need to pay something. When you're comparing plans, be aware of these out-of-pocket costs:
A monthly premium is the fee you pay to the plan in exchange for coverage. Each Medicare prescription drug plan has a set monthly premium. Generally, higher-premium plans will have more coverage and lower deductibles or copayments, and lower-premium plans have less coverage with higher deductibles or copayments.
An annual deductible is the amount you pay out-of-pocket for your prescription drugs before your Medicare prescription drug plan begins to pay. It's a pre-set, fixed cost. Be aware that not all plans have an annual deductible.
A copay (also known as a copayment) is a kind of cost sharing. You pay a predictable, set amount for a covered drug each time you fill a prescription. The actual cost will depend on which tier your drug is in. In most situations, generic drugs will have a lower copay than brand-name drugs.
Coinsurance is another kind of cost sharing you may have. You pay a percentage of the cost for a covered drug each time you fill a prescription. Your plan pays the remaining amount owed. The percentage will vary, depending on your plan.
Find Medicare prescription drug plans in your area
How do my drugs and drug tiers affect what I pay with Medicare Part D?
All Medicare Prescription Drug plans have a standard level of prescription drug coverage. This coverage is set by Medicare. However, plans differ in the specific drugs they cover and how they divide these drugs into tiers. The tiers determine what you’ll pay.
Every Medicare Part D plan has a formulary, or drug list, that shows all the brand name and prescription drugs it covers. Usually, drugs in lower tiers will cost less and drugs in higher tiers will cost more.
Below is an example of a tier structure for a typical Medicare prescription drug plan. The actual tier structure for the plan you choose may vary.
Lowest copay
Lower-cost, commonly-used generic drugs
Low copay
