Medicare cares about what they call your total drug costs.
Your total drug costs are:
If your total drug costs are greater than $2,700 in 2009, you will probably hit the "coverage gap." The coverage gap is sometimes called the donut hole. Then you will pay 100% of your drug costs until your out-of-pocket costs reach $4,350, or your total drug costs hit $6,153.75.
After that, to get the prescriptions on your plan's list of covered drugs, you will pay either:
With most of the Medicare Prescription Drug Plans, you will probably pay different amounts of your drug costs over the course of a year. Some months you will pay less; other months you will pay more. You can budget for those months if you understand how the program works.
NOTE: If you qualify for extra help with your Medicare prescription drug costs, your costs will be much lower. Visit our extra help section for more information about this valuable benefit.
The charts below show some examples of what you would pay each month with a sample plan if the cost of your drugs stays the same from month to month. These are only examples. The plan you choose may have very different costs.
If your drugs cost $400 a month and your cost share before the coverage gap is 25%
Total drug cost for January: your deductible + your cost share + plan share = $400.00
Total drug cost for February: your cost share + plan share = $400.00
Total drug cost for March: your cost share + plan share = $400.00
Total drug cost for April: your cost share + plan share = $400.00
Total drug cost for May: your cost share + plan share = $400.00
Total drug cost for June: your cost share + plan share = $400.00
You entered the coverage gap during this month.
Total drug cost for July: your cost share + plan share = $400.00
Total drug cost for August: your cost share + plan share = $400.00
Total drug cost for September: your cost share + plan share = $400.00
Total drug cost for October: your cost share + plan share = $400.00
Total drug cost for November: your cost share + plan share = $400.00
Total drug cost for December: your cost share + plan share = $400.00
| Total Premium | $336.00 | without the Medicare plan, |
| Your Cost Share Total | $2,996.25 | you would have paid |
| Your Overall Costs | $3,332.25 | $4800.00 |
In this example, in July, the total drug cost paid by you and your plan, not counting premiums, reaches $2,800. This brings you into the coverage gap, which starts once total drug costs are greater than $2,700. You pay 100% of drug costs in the coverage gap.
In this example, you do not reach the level of catastrophic coverage.
Without the Medicare plan, you would have paid $4,800 for your drugs. In this example, your plan saves you $1,467.75.
Look at the next example to see how the catastrophic limit works.
If your drugs cost $600 a month and your cost share before the coverage gap is 25%
Total drug cost for January: your cost share + plan share = $600.00
Total drug cost for February: your cost share + plan share = $600.00
Total drug cost for March: your cost share + plan share = $600.00
Total drug cost for March: your cost share + plan share = $600.00
You entered the coverage gap during this month.
Total drug cost for May: your cost share + plan share = $600.00
Total drug cost for June: your cost share + plan share = $600.00
Total drug cost for July: your cost share + plan share = $600.00
Total drug cost for August: your cost share + plan share = $600.00
Total drug cost for September: your cost share + plan share = $600.00
Total drug cost for October: your cost share + plan share = $600.00
You entered catastrophic coverage during this month.
Total drug cost for November: your cost share + plan share = $600.00
Total drug cost for December: your cost share + plan share = $600.00
| Total Premium | $336.00 | without the Medicare plan, |
| Your Cost Share Total | $4,402.31 | you would have paid |
| Your Overall Costs | $4,738.31 | $7200.00 |
In this example, in May, the total drug cost paid by you and your plan, not counting premiums, reaches $3,000. This brings you into the coverage gap, which starts once total drug costs are greater than $2,700. You pay 100% of drug costs in the coverage gap.
In this example, in November, the total drug cost paid by you and your plan, not counting premiums, reaches $6,600. This brings you to the level of catastrophic coverage, which begins when total drug costs are greater than $6,153.75.
Without the Medicare plan, you would have paid $7,200 for your drugs. In this example, your plan saves you $2,461.69.
You may find another plan in your area that has different monthly costs that fit your budget better. You may also be eligible for extra help paying the costs, depending on your income and assets.
NEXT:What counts for my “out-of-pocket” costs and catastrophic coverage?
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