April 14, 2011
Medicare Part D Premiums
Monthly premiums can differ significantly among Medicare Part D plans (also known as Medicare Prescription Drug Plans (PDP)s). Once you have mastered a few key concepts associated with Part D plan pricing considerations, you'll be in a much better position to make an informed enrollment decision that keeps your financial considerations in the forefront.
Monthly Premiums
The first thing you must understand is that PDPs do not have a standardized monthly premium. Additionally, if one plan has a higher monthly premium than another, it does not necessarily mean that the more expensive premium plan has better Medicare prescription drug coverage. A less expensive premium Medicare prescription drug plan does not necessarily have inferior drug coverage to a more expensive plan.
You should use online tools such as our free tool to compare Medicare Part D plans to review annual costs (including deductibles and co-payments along with monthly premium) for the plans available in your area covering the drugs you take on a regular basis. If you do not take any medications, the cost of monthly premiums alone is a more dominant aspect of the purchase decision process.
People receiving the full Low Income Subsidy, also known as the Extra Help program, do not pay a monthly premium for a Part D plan if the Part D plan's monthly premium is at or below the benchmark monthly premium for Part D plans in their region. People qualify for the Extra Help by meeting certain income and asset considerations or belonging to other programs such as Medicaid. Many people are eligible for these savings and don't know it. For more information about this Extra Help, contact your local Social Security office or call 1-800-MEDICARE (1-800-633-4227), 24 hours per day, 7 days per week. TTY users should call 1-877-486-2048.
Medicare Part D Costs
It is important to remember that a prescription drug plan can cost more than its monthly premiums. You may also have out-of-pocket expenses associated with your medications such as deductibles (where you pay the retail price of a drug) and cost-sharing such as co-payments (where you pay a flat fee for a medication) or co-insurance (where you pay a percentage of the retail price of the medication). Medicare drug plans have a maximum deductible allowed by the Centers for Medicare and Medicaid Services (CMS), but plans still have the option of reducing or eliminating this deductible for the plan's enrollees. Additionally, different plans may charge different co-payments for the same medication. It is always recommended to compare the annual estimated costs among PDPs based on your personal medication usage and not compare premiums alone.
Compare Medicare Part D Plans
In order to make an informed enrollment decision on a PDP, it is recommended you utilize a comparison tool that will display annual cost estimates that include your projected medication costs with the monthly premiums, among the available plans. Compare Medicare Part D Plans using our free anonymous tool to evaluate estimated costs among Medicare Part D plans.
