Understanding the Medicare Prescription Drug Plan

You will have out of pocket costs. There is a monthly premium that will be deducted from your social security check just like medicare Part B. The amount varies by plan but averages $35.00. If, for example your medicine costs $100, you will have to pay $25 each time you get it filled. Once you spend $2250 for drugs in a year, you will have a gap in coverage. For drugs over that amount you will pay full price until you have spent $5100 on prescription drugs in that same year. Once you reach that amount your prescriptions will cost either a 5 percent co-pay or $5 for brand, whichever is higher.

One thing many people do not know - the initial $2250 of drugs includes the actual retail cost of drugs including your co-payment. You may find you land in the so-called donut hole, paying full price for all your drugs (plus your part D premium)sooner than you anticipated.