What Does Medicare Cost?
Medicare Part D continued...
You have to pay for your medicines yourself until you reach an out-of-pocket threshold, which is also called a maximum spending limit. In 2015, that limit, which is also called your out-of-pocket threshold, is $4,700.
On the plus side, the entire cost of a brand-name drug is added to the maximum spending limit. That's a bonus because you only pay a discounted price for a brand-name drug, but you get "credit" for the whole amount. That means you'll reach the maximum more quickly, when Medicare will start sharing the costs with you again.
The costs that help you reach the $4,700 threshold include what you spent on drugs while in the doughnut hole. But your monthly premiums do not..
Costs after the doughnut hole: When Medicare starts paying again, it's called catastrophic coverage. Then, you only have to pay a small copay or coinsurance toward your prescription drug costs for the rest of the year. In 2015, for generic medicines, you'll pay 5% of the drug's cost or $2.65, whichever is higher. For brand-name drugs, you'll pay 5% of the drug's cost or $6.60, whichever is higher.
Medicare Advantage (Part C)
These are health plans sold by insurance companies but overseen by Medicare. They are alternatives to original Medicare, and usually offer more services than original Medicare. Medicare Advantage plans typically cover hospitalization (Part A), outpatient care (Part B), and prescription drugs (Part C) under one plan.
To qualify for Medicare Advantage, you need to have Medicare Parts A and B. So that means you'll at least need to pay the Part B monthly premium.
On top of that fee, you may need to pay a monthly premium for the Medicare Advantage plan itself. The prices vary a great deal depending on the plan you've chosen.
This is supplemental health insurance provided by private insurance companies that covers some of the costs Medicare doesn't, including copays and deductibles. You don't need, nor can you buy, a Medicare Advantage Plan if you carry a Medigap policy.