How Plans Work
A significant portion of the law is dedicated to outlining the way the prescription plan should work. The standard benefit for 2011 works like this:
| What Happens |
Range of Drug Costs |
Cost to You |
Cost to Medicare |
|
You must satisfy the annual deductible of $310, in addition to your monthly premium. (If you are married you and your spouse must each satisfy this deductible.)
|
$310 deductible
|
$310 deductible + a monthly premium
|
$0
|
|
The Medicare Part D standard plan pays 75% of the $2,530 in eligible drug costs. You pay 25%.
|
$310 to $2,840
|
$710 or 25% of the $2,840
|
$2,130 or 75% of the $2,840
|
| After your total yearly drug costs reach $2,840, you receive a discount on brand name drugs and pay 93% of the plan's costs for all generic drugs, until your yearly out-of-pocket drug costs reach $4,550. |
$2,840 to $4,550
|
$4,550
|
$318.50
|
|
At this point you have $4,550 in drug costs.
|
$4,550
|
5% or a co-payment of $2.50 for generic and $6.30 for brand name drugs, whichever is greater
|
95% of any remaining prescription drug costs for the year
|
If you qualify for Medicaid or the 'Extra Help' Program, depending upon your income, you will pay $0 or $63 annual deductible. Your copays will range from $1.10 to $2.50 for generic drugs and $3.30 to $6.30 for brand drugs, or 15% coinsurance. Please contact Social Security or a licensed insurance broker to see if you qualify.
There will be many plans to choose from. Some will offer lower premiums than others while others may offer a greater number of covered drugs. You can be certain that whenever you see the Medicare Prescription logo, the Centers for Medicare and Medicaid Services (CMS), has approved the plan.