All Medicare Part D Plans have a different rate and coverage structure. However, most charge a monthly premium that you must pay, in addition to your Part B plan premium that comes out of your Social Security. If you choose to get your Part D bundled with a Medicare Advantage Plan, the monthly premium includes the cost for your prescription coverage.
As with other types of health insurance, Part D plans have deductibles, copays and coinsurances. If a plan has a deductible, it is the amount of money that you pay out-of-pocket before your drug coverage starts.
Copayments and coinsurances are what you pay at the pharmacy for your covered prescriptions after your deductible is met. Your drug plan pays its share for your covered medications, and you pay the balance.
Plans also have an annual coverage limit. When you reach the limit you fall into the coverage gap, also known as the “doughnut hole”. While you’re in the donut hole you will have to pay all of the costs up to a yearly limit. Once you reach the limit, you qualify for catastrophic coverage.
The good news is that the coverage gap is slowly going away. The new Affordable Care Act healthcare law started phasing out the doughnut hole in 2011, and it will be gone for good in 2020.
If you have a low income you may qualify for Extra Help through Social Security. The Extra Help program uses the federal poverty level to determine the level of assistance. Call your local SSI office for more information.