All of the stand-alone Part D plans and most of the drug plans sold in connection with Medicare Advantage plans (MA-PDs) charge a premium for the drug benefit. The premium amount will depend on where you live and the plan you choose. This premium is in addition to any Part B premium that you pay or have withheld from your monthly Social Security check.

What will my monthly prescription drug plan premium be?

Every prescription drug plan (PDP) charges a monthly premium to enroll, but the amount varies by plan. In some states, you may find plans charging as little as $2 per month. Other plans may be charging a lot more, some as high as more than $100. Many drug plan sponsors, such as Aetna, Cigna, Humana, Prescription Pathway, and WellCare, offer more than one plan option, and will price each option differently. The higher premium plans may have a lower deductible or no deductible at all, and may offer lower co-pays. You should figure out which plans cover your drugs and also compare the co-pays for each drug. The final numbers you should look at are your total expected costs for the year after you add up premiums, co-pays, deductible, and the risk of falling into the coverage gap.

Plans that fill in some, or all, of the coverage gap ("donut hole") are also more likely to have a high premium when compared to those that do not do this. Still, premiums vary for a number of reasons, and it is not always true that higher premiums mean lower drug costs to the beneficiary or a bigger formulary. As an example, Table 4 shows the range of premiums being charged by PDPs in Arizona in 2009.

Table 4: Prescription Drug Plan (PDP) premiums, cost-sharing requirements, and drug coverage: Arizona

Information is as of October 9, 2008 as accessed on www.medicare.gov

What if I want to get my drug coverage through a Medicare Advantage plan?

Medicare Advantage plans may be health maintenance organizations (HMOs), preferred provider organizations (PPOs), or private fee-for-service plans. There are also some Medicare Advantage plans tailored to people with special needs, such as long-term care needs. Every Medicare Advantage plan must offer at least one Part D prescription drug plan. Some plans may offer options that don't include Part D coverage. (These are designed for enrollees who may have other sources of drug coverage, such as through the Veteran's Administration.)

You may see 2 premiums listed with Medicare Advantage plans: (1) the premium for the MA-PD (the drug premium) and (2) a total Medicare Advantage premium. The total Medicare Advantage premium includes your cost for medical care coverage such as hospital, doctor, and other non-drug services, and takes the place of the Part B premium.

How much premium will I have to pay if I qualify for low income assistance?

If your income is less than a certain amount that is pre-set every year, you may be able to get help paying the premium and co-pays of Medicare Part D. If you qualify for special low-income assistance, then your monthly premium may be partly or fully paid by Medicare, Medicaid, and Social Security, and your co-pays will also go down. If you select a drug plan that has a premium at or below a certain amount, then you will not have to pay any Part D premium. But, if you pick any other drug plan, then you will have to pay a premium. How much you have to pay depends on the level of help for which you qualify and that particular drug plan's benefits. For more information on getting help with prescription drug costs go to www.socialsecurity.gov/prescriptionhelp/index.htm.

Last Medical Review: 10/23/2008
Last Revised: 10/23/2008