Medicare set forth the following guidelines for 2009 Medicare Part D prescription drug plans, however, available plans may vary from these guidelines.
Monthly Premium - $35.00 to $37.00 Paid by the Medicare Beneficiary (See our Medicare Part D Plan Overview by State to review features and premiums of plans available in your state.) Annual Deductible - $295 Paid by the Medicare Beneficiary
Cost of Prescriptions ($296 - $2700) -
25% Paid by the Medicare Beneficiary - 75% Paid by Medicare
Cost of Prescriptions ($2701 - $6153.75) -
100 % Paid by the Medicare Beneficiary - 0% Paid by Medicare
More than $4350 annual out-of-pocket threshold - The Medicare Beneficiary pays the greater of either 5% of the prescription drug costs or $2.4 for generic prescription drugs and $6 for brand-name prescription drugs. Medicare Part D pays the lesser of either: 95% of the prescription drug costs or the balance of the prescription drug costs.
Online Calculator
Click on the link to calculate an estimate of your out-of-pocket expenditures with Medicare Part D.
Here is an example of how the out-of-pocket costs add-up.
If a Medicare beneficiary had prescription drug costs of $6153.75 per year, here is how much it would cost the Medicare Part D beneficiary personally or out-of-pocket:
Annual Deductible (or first $295 spent):
-
$295
25% of ($2700 - $295 = $2405):
-
$601.25
100% of ($6153.75 - $2700 = $3453.75):
-
$3453.75
Total Cost to Medicare Beneficiary (out-of-pocket):
-
$4350
Therefore, our Medicare beneficiary that had Prescription drug costs of $6153.75, would have approximately $4350 of out of pocket or personal costs per year.
What if our example Medicare beneficiary has Prescription drug costs of more than $6153.75?
Once our example Medicare Beneficiary has spent approximately $4350, the last paragraph of the guidelines goes into effect:
More than $4350 annual out-of-pocket threshold
The Medicare Beneficiary pays: the greater of either: (1) 5% of the Prescription Drug Costs or (2) $2.4 for generic Prescription Drugs / $6 for brand-name Prescription Drugs.
Medicare Pays: the lesser of either: (1) 95% of the Prescription Drug costs or (2) the balance of the Prescription Drug costs.
At this point in our example, the costs to the Medicare beneficiary will depend on the type/cost of prescription medication that is purchased. For example, if the Medicare beneficiary purchases non-generic Prescription drugs costing more than $6, the Medicare Beneficiary would need to pay 5% of the total costs.
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