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Medicare Part D Deductible Costs


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Summary: The Medicare Part D deductible is the amount you pay for your prescription drugs before your plan begins to help. In 2020, the Medicare Part D deductible can’t be greater than $435 a year.

You probably know that being covered by insurance doesn’t mean you can always get services and benefits for free. You may have various out of pocket costs with Medicare insurance, including copayments, coinsurance, and deductibles. “Deductible” is a common term in insurance. Generally the lower the deductible, the less you are responsible for paying out-of-pocket before your insurance coverage kicks in.

The Medicare Part D deductible is the amount you most pay for your prescription drugs before your plan begins to pay. The amount of the Medicare Part D deductible can vary from plan, but Medicare dictates that it can be no greater than $435 a year in 2020. Some plans don’t have a deductible. According to 2019 eHealth research, the average deductibles for Part D plans increased from $292 to $308.

Average Part D Deductibles

Some Medicare Part D plans have $0 deductibles, which means you are only responsible for a set copayment or coinsurance amount when you pick up your prescription drugs.

In some plans, the Medicare Part D deductible only applies to certain tiers or prescription drugs, such as tier 3 and above.

Medicare Part D plan prescription drug tiers are usually set in the following way:

  • Tier 1: preferred generic, generally the lowest cost tier
  • Tier 2: generic, generally cost more than tier 1
  • Tier 3: preferred brand, generally cost more than tier 2
  • Tier 4: non-preferred brand, generally cost more than tier 3
  • Tier 5: specialty tier, generally cost more than tier 4
  • Tier 6: select care drugs

If you only take generic prescription drugs, for example, you may not be subjected to the deductible in certain plans.

When will I meet my Part D deductible?

When you meet your Part D deductible depends on:

  • How much your deductible is
  • What prescription drugs you take and how much they cost
  • How many prescription drugs you take

The amount you pay towards your Medicare Part D deductible is for every calendar year and resets January 1.

Suppose your Part D deductible is the maximum allowed in 2020 ($435).

Scenario 1:

Prescription Drug 1 monthly cost Prescription drug 2 monthly cost Total monthly drug spending Month you reach your $435 deductible
$5 $15 $20 Never: your total yearly spending is only $240 so you pay this amount out of pocket.

 

Scenario 2:

Prescription Drug 1 monthly cost Prescription drug 2 monthly cost Total monthly drug spending Month you reach your $435 deductible
$15 $47 $62 August: 8 months of spending $62 = $496

 

Scenario 3:

Prescription Drug 1 monthly cost Prescription drug 2 monthly cost Total monthly drug spending Month you reach your $435deductible
$100 $15 $115 April: 4 months of spending $115 = $460

 

Once you meet your deductible, you may not be covered 100%. You may still be responsible for copayments and coinsurance every time you fill a prescription.

Do you have any questions about your Medicare Part D deductibles? Feel free to enter your zip code on this page to start browsing Medicare Part D plans. Or, if you prefer to get personalized assistance, contact eHealth to speak with a licensed insurance agent. We can help you find Medicare plan options that address your Medicare needs.

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