Here’s How the Part D Deductible Works
Feb 08, 2016
Help! My drug costs have gone up tenfold. In December, I paid $45 for my prescriptions. The January bill was $445. How can the drug companies get away with this? Signed, Susan.
Susan, don’t blame the drug company. It is just following Medicare’s standard Part D prescription drug plan formula and charging a deductible.
In other words, once the beneficiary has paid 100% of the costs up to the deductible’s limit, costs will drop, sometime considerably.
After the big bill in January, Susan’s drug costs will drop to $72 in February, after meeting the plan's 2021 deductible.
Here are some important points to know about the drug plan deductible.
- In some plans, Tier 1 and/or Tier 2 medications are not subject to the deductible. That means, the plan starts paying its share for those medications from day one.
- Drugs that are not listed in the plan’s formulary do not apply to the deductible.
- Money spent in the Deductible stage will count toward getting out of the donut hole (Coverage Gap). (Read more at www.65incorporated.com/topics/medicare-part-d-prescription-drug-plans/paying-drugs-donut-hole-q-65-incorporated.)
- A plan cannot change the deducible amount during a calendar year.
When choosing a drug plan, it’s important to go beyond premium and deductible to the overall costs for year. After the initial sticker shock, it’s possible the costs may end up lower.
Sam was considering two plans. The first one had no deductible with total out-of-pocket costs for the year of $629. The second plan had a $400 deductible; however, his costs for the year would be $416. Once he reaches the deductible in this plan, his copayments will be lower.