Powered by Q1Group LLC
Education and Decision Support Tools for the Medicare Community
  • ☰ MENU
  • Home
  • Contact
  • MAPD
  • PDP
  • 2019
  • FAQs
  • Articles
  • Contact
  • 2019
  • FAQs
  • Articles
  • Latest Medicare News

Is Co-Payment less expensive (or better) than Co-Insurance?

The out of pocket cost differences between Co-Insurance and Co-Payment will depend on the medications that you are using and how they are organized in a specific Medicare Part D plan.

And more importantly: Co-insurance depends on the retail cost of prescription drugs and, in recent times, retail drug prices can escalate throughout the Medicare plan year.

Before we look at a few examples, let us review the two "cost-sharing" options:
  • Co-Insurance means that you will be responsible for a certain percent of the prescription costs (usually 25% to 30%) and the insurance company will responsible for a certain percent of the prescription cost (usually 70% to 75%). So for a covered medication costing $100 a month retail - you would pay $25 a month with 25% co-insurance.

  • Co-Payment refers to a fixed dollar amount assigned to a logical grouping or formulary tier of medications (for example: $30). Usually, a formulary tier may include a specific class of medication such as, "generics" or "preferred brand name" medications. Remember that Medicare prescription drug plans are offered by companies that group their covered medications into these logical classes or tiers within the Medicare Part D formulary or drug guide. This logical grouping of medication may vary from company to company. Therefore, a medication that is grouped as a low-costing Tier 2 medication on one Medicare Part D plan, may be grouped as a more-expensive Tier 3 medication in another Medicare drug plan. So, the costs of the different co-pays also varies from plan to plan (for example Tier 2 may be $30 or $60) or the co-pays for a Generic medication Tier may vary from $0 to perhaps $7+, depending on the Medicare plan.

Here are a few examples of how the two "cost-sharing" options could compare:
  • Example 1. Advair Diskus: may have a retail cost of $270
  • Co-Insurance (20%) - you pay $54
  • Co-Insurance (48%) - you pay $130
  • Co-Payment (Preferred Brand-Name Tier) - you pay $23 to $47 (depending on the plan)
  • Example 2. Cellcept: may have a retail cost of $1,300
  • Co-Insurance (25%) - you pay $325
  • Co-Insurance (Preferred Brand-Name Tier) (16%) - you pay $208 (depending on the plan)
  • Example 3. Premarin: may have a retail cost of $130
  • Co-Insurance (35%) - you pay $46
  • Co-Payment (Preferred Brand-Name Tier) - you pay $42 to $95 (depending on the plan)
  • Example 4. Januvia: may have a retail cost of $370
  • Co-Insurance (20%) - you pay $74
  • Co-Payment (Generic Tier) - you pay $22 to $47 (depending on the plan)

Where can I find an approximation of retail prescription drug cost?

Both our Formulary Browser (showing all drugs for a single Medicare plan) and our Drug Finder (www.Q1Rx.com - showing all Medicare plans covering a single drug) display the average retail cost for medications, details of the drug utilization management restrictions, and with the drug cost-sharing information for all Medicare Part D plans and Medicare Advantage plans that include drug coverage. plans.


Medicare Part D Drug Finder

As can be seen by these cost-sharing examples above, although the retail price may vary, the Co-Payment for this class or tier of medication remains the same and the Co-Insurance figure fluctuates as a percentage of the retail price - meaning your drug costs will fluctuate throughput the plan year as the retail drug price changes.

Therefore, the most affordable alternative between Co-Payment and Co-Insurance plans will depend on the retail costs of medication that you are using and the placement of those medications within the tiers of a plan's formulary.

Please note that we show the historical retail price trends in our Drug Finder (Q1Rx.com) - just click on the retail price link. This means, you can see how the price for this medication has changed over the years and this may give you an idea of whether (historically) co-insurance is a riskier alternative as compared to a Medicare Part D plan that offers a fixed co-payment as a cost-sharing alternative.
Advertisement


Tips & Disclaimers
  • The Medicare Advantage and Medicare Part D prescription drug plan data on our site comes directly from Medicare and is subject to change.
  • Medicare has neither reviewed nor endorsed the information on our site.
  • We provide our Q1Medicare.com site for educational purposes and strive to present unbiased and accurate information. However, Q1Medicare is not intended as a substitute for your lawyer, doctor, healthcare provider, financial advisor, or pharmacist. For more information on your Medicare coverage, please be sure to seek legal, medical, pharmaceutical, or financial advice from a licensed professional or telephone Medicare at 1-800-633-4227.
  • We are an independent education, research, and technology company. We are not affiliated with any Medicare plan, plan carrier, healthcare provider, or insurance company. We are not compensated for Medicare plan enrollments. We do not sell leads or share your personal information.
  • Benefits, formulary, pharmacy network, provider network, premium and/or co-payments/co-insurance may change on January 1 of each year. Our PDP-Compare.com and MA-Compare.com provide highlights of annual plan benefit changes.
  • The benefit information provided is a brief summary, not a complete description of benefits. For more information contact the plan.
  • Limitations, copayments, and restrictions may apply.
  • We make every effort to show all available Medicare Part D or Medicare Advantage plans in your service area. However, since our data is provided by Medicare, it is possible that this may not be a complete listing of plans available in your service area. For a complete listing please contact 1-800-MEDICARE (TTY users should call 1-877-486-2048), 24 hours a day/7 days a week or consult www.medicare.gov.
  • When enrolling in a Medicare Advantage plan, you must continue to pay your Medicare Part B premium.
  • Medicare beneficiaries with higher incomes may be required to pay both a Medicare Part B and Medicare Part D Income Related Monthly Adjustment Amount (IRMAA). Read more on IRMAA.
  • Medicare Advantage plans that include prescription drug coverage (MAPDs) are considered Medicare Part D plans and members with higher incomes may be subject to the Medicare Part D Income Related Monthly Adjustment Amount (IRMAA), just as members in stand-alone Part D plans. In certain situations, you can appeal IRMAA.
  • You must be enrolled in both Medicare Part A and Part B to enroll in a Medicare Advantage plan. Members may enroll in a Medicare Advantage plan only during specific times of the year. Contact the Medicare plan for more information.
  • If you are enrolled in a Medicare plan with Part D prescription drug coverage, you may be eligible for financial Extra Help to assist with the payment of your prescription drug premiums and drug purchases. To see if you qualify for Extra Help, call: 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048, 24 hours a day/ 7 days a week or consult www.medicare.gov; the Social Security Office at 1-800-772-1213 between 7 a.m. and 7 p.m., Monday through Friday. TTY users should call, 1-800-325-0778; or your state Medicaid Office.
  • Medicare evaluates plans based on a 5-Star rating system. Star Ratings are calculated each year and may change from one year to the next.
  • A Medicare Advantage Private Fee-for-Service plan (PFFS) is not a Medicare supplement plan. Providers who do not contract with the plan are not required to see you except in an emergency.
  • Disclaimer for Institutional Special Needs Plan (SNP): This plan is available to anyone with Medicare who meets the Skilled Nursing Facility (SNF) level of care and resides in a nursing home.
  • Disclaimer for Dual Eligible (Medicare/Medicaid) Special Needs Plan (SNP): This plan is available to anyone who has both Medical Assistance from the State and Medicare. Premiums, co-pays, co-insurance, and deductibles may vary based on the level of Extra Help you receive. Please contact the plan for further details.
  • Disclaimer for Chronic Condition Special Needs Plan (SNP): This plan is available to anyone with Medicare who has been diagnosed with the plan specific Chronic Condition.
  • Medicare MSA Plans combine a high deductible Medicare Advantage Plan and a trust or custodial savings account (as defined and/or approved by the IRS). The plan deposits money from Medicare into the account. You can use this money to pay for your health care costs, but only Medicare-covered expenses count toward your deductible. The amount deposited is usually less than your deductible amount, so you generally have to pay out-of-pocket before your coverage begins.
  • Medicare MSA Plans do not cover prescription drugs. If you join a Medicare MSA Plan, you can also join any separate (stand-alone) Medicare Part D prescription drug plan
  • There are additional restrictions to join an MSA plan, and enrollment is generally for a full calendar year unless you meet certain exceptions. Those who disenroll during the calendar year will owe a portion of the account deposit back to the plan. Contact the plan provider for additional information.
  • Medicare beneficiaries may enroll through the CMS Medicare Online Enrollment Center located at www.medicare.gov.
  • Medicare beneficiaries can file a complaint with the Centers for Medicare & Medicaid Services by calling 1-800-MEDICARE 24 hours a day/7 days or using the medicare.gov site. Beneficiaries can appoint a representative by submitting CMS Form-1696.