What Does Medicare Cost?
Medicare Part D
Part D is your prescription drug coverage.
Premium costs. The monthly fee you pay varies by the plan you choose. The average premium for the last several years has been about $30, and in 2015, the average is $33. If you have a higher income, you may pay more each month. In 2015, households with income of more than $170,000 or individuals with income greater than $85,000 pay on average $45 per month.
Deductible costs: Each year you pay a deductible before Medicare starts sharing the cost for your medicines. Although the deductible may vary from plan to plan, no plan may charge more than $320 in 2015. In 2016, the maximum will be $360.
After you've paid the deductible, your Medicare prescription drug plan kicks in and you pay a copay or coinsurance.
Out-of-pocket costs: The part you pay for your medicines is either called a copay or coinsurance. The amount depends on the plan you've chosen. You may pay more for some drugs than others, such as brand-name drugs.
Costs in the doughnut hole: If you spend a certain amount on medicines, you'll have a gap in your drug coverage, which is often called the doughnut hole.
While in the doughnut hole, in 2015 and 2016 you pay 45% of the cost for a brand-name medicine. This will steadily decrease until it reaches 25% in 2020.
For generic medicine, you pay 65% of the cost in 2015. This will steadily decrease to 25% in 2020.
You’ll Pay This Percentage for Brand-Name Drugs
in the Doughnut Hole
You’ll Pay this Percentage for Generic Drugs
in the Doughnut Hole
After the total cost of your drugs (what you and your health plan paid combined) reaches a certain level, Medicare stops paying for them. In 2013, that level is $2,970. For 2014, it will be $2,850.
Although you have to start paying your drug costs on your own, you receive a 55% discount for covered brand-name drugs. That means you pay 45% of the drug's cost. Prescription drug plans will pay 35% of the cost of covered generic drugs . That means you pay 65% of the cost of generic drugs that are covered by Medicare.