Medicare.gov - Tutorial - Compare Medicare Plans in Your List

There are a number of different costs associated with a Medicare Part D plan or a Medicare Advantage plan and they sometimes blur together when all presented at one time. Here are a few of the costs that we will see on this Your Plan Results page and when you go into more plan details.

• Negotiated Retail Drug Costs — What you would pay at a given pharmacy for your medications if you did not have prescription drug coverage. Your total annual retail drug cost is used to determine when you leave your Medicare plan’s Initial Coverage Phase and enter into the Coverage Gap or Donut (Doughnut) Hole phase./li>
• Drug Cost Sharing — The price you pay for a medication covered by your Medicare prescription drug plan. Cost sharing can vary greatly between Medicare plans (on one plan you may pay $0 and on another plan you will pay $60 for the same medications). Cost Sharing can even be different when the same Medicare plan is used at different pharmacies (for example, a preferred network pharmacy as compared to a network pharmacy).
• Initial Deductible — The amount you pay before your Medicare Part D plan begins to pay or before you reach your Medicare plan’s Initial Coverage phase. The Initial Deductible counts toward your total drug spend or out of pocket threshold. You will notice that some Medicare Part D plans still provide some drug coverage in the Initial Coverage, so for some medications you may see cost sharing values even when you are still in the Initial Deductible phase.
• Monthly Plan Premiums — This is what you pay just to have your drug coverage. Medicare Part D premiums are like the monthly premiums for any other type of insurance and just ensure that you have coverage available in case you need it. The Medicare Part D monthly premiums do not count toward your Deductible, your Donut Hole, or your total out of pocket drug spending.

One of interesting feature that the Medicare.gov site provides is a Plan Rating star system based on a number of Medicare plan quality factors. The ratings come from several sources including a sampling of experiences from people who have been enrolled in the particular Medicare plan and, like any sample of events, these Medicare findings may or may not correspond with your own experiences. We have found that often times a Medicare Plan that had a lower Medicare star rating one year will really work to raise the customer rating in the next years. When a new annual Open Enrollment Period begins, Medicare may not have yet gathered all of the necessary data and you may at some time find a screen message saying that the Medicare star or quality ratings data was not yet loaded by Medicare. No problem, the star ratings will return and you need to just check back to the Plan Finder at a later date.

You may notice in our Plan Finder screen example that we chose two different pharmacies from the previous Step 3 of 4 and these two pharmacies have different Estimated Annual Costs for each of the three chosen plans we are comparing.

In the example screen, we see that one of the chosen plans has an Initial Deductible and the other two plans do not have a deductible. If you look closer to plan cost details, you may notice that sometimes the Initial Deductible (again, this is the part of your Medicare plan where you pay for everything yourself) does not always align neatly into the Plan Finder and there are two possible reasons for the Total Cost figure to be over the initial deductible value:

(1) there are some medications that are on the Drug List that are not included in the Medicare Part D plan formularies — and since they are not in the formulary the cost is not included toward the Initial Deductible or the Initial Coverage Limit (before entering the Doughnut hole).

(2) Straddle Claims that break purchases over several phases of a Medicare Part D plan. The Medicare.gov website shows costs for a total month and is not programmed to break coverage periods within a month. In our Q1Medicare.com Doughnut Hole Calculator, e break the initial deductible into smaller portions and allow a person to go through multiple phases of coverage in a single month. For example, a Medicare beneficiary could meet their initial deductible with the purchase of one expensive medication — well before the end of the first month and with a very expensive drug like in our example screens (retail costs of around $10,000), the person would go through all phases of the Medicare Part D plan and into Catastrophic Coverage with one purchase.

Nearing the bottom of the page is the "Drug Coverage Information" which shows the medications from the Drug List that are covered under the Medicare Part D plan formularies. Notice also that some medications are subject to usage management such as prior authorization, step therapy or quantity limits.