In the past, we have found that some people have mistakenly thought that Medicare plans with no (or a $0) initial deductible or a low monthly premium were always less expensive on an annual basis - without considering prescriptions or healthcare. But, as our examples show below, this is often not the case.
Example 1: You use no prescription medications (and your health is stable)...
... Consider the lowest premium Medicare Part D or a $0 premium Medicare Advantage plan.
If you are using no medications, then the Medicare prescription drug plan (or Medicare Advantage plan) with the lowest premium may be your most economical solution. Although some people would prefer to enroll in the lowest premium plan that has a $0 deductible (or exclude Tier 1 and Tier 2 drugs from the deductible), just in case they do need to purchase a few prescriptions during the year. You might also consider paying a slightly higher monthly premium for a Medicare drug plan with a lower premium, $0 deductible, and a large drug list or formulary.
Here is an example from 2025 showing a stand-alone Medicare Part D prescription drug plan with a $0 premium that excludes low-costing Tier 1 and Tier 2 drugs from the deductible.
Example 2: You use only a few low-costing generic medications...
... Consider a low premium Medicare drug plan (PDP or MAPD) that has Tier 1 and Tier 2 drugs excluded from the formulary.
If you use only low-cost Tier 1 or Tier 2 generic medications, and you choose a Medicare art D plan with a low monthly premium and standard initial deductible, you may find that the plan excluded Tier 1 and Tier 2 drugs from the deductible and you have immediate coverage as if you had a plan with a $0 deductible. For example, as shown in the graphic above, the 2025 Wellcare Value Script plan has a standard $590 Initial Deductible, but the deductible does not apply to Tier 1 and Tier 2 generic medications. So this 2025 Medicare Part D plan has a low monthly premium, a generous formulary, and also provides coverage for Tier 1 and Tier 2 generics from the very start of the plan year.
If you anticipate that your prescription needs could change during the plan year, you can also consider a Medicare drug plan with lower cost-sharing for drug tiers above Tier 1 and Tier 2.
In this example from our 2020 Medicare Part D Plan Finder below, there are two plans with the same premium, the same initial deductible ($435), and both plans exclude Tier 1 and Tier 2 drugs from deductible, but the plan with the larger formulary (3,469 drugs vs. 3,186 drugs) has higher cost sharing for Tier 4. So, if you are unexpectedly prescribed a Tier 4 Non-Preferred Brand Drug, you would pay 46% of the retail drug price.
Example 3: You use very expensive brand-name medications...
... You must ensure that your prescription drugs are covered by your chosen Medicare drug plan.
If you use higher-cost brand-name medications - for example, with a retail cost of over $11,000 per month - you may, in your first month, go through all phases of your Part D coverage and into Catastrophic Coverage. In such a situation, you may simply benefit from a Medicare Part D plan with the lowest premium, but most importantly, you must ensure that your medications are on the plan’s formulary or drug list. Otherwise, you will pay 100% out-of-pocket for any non-formulary drugs (as seen in the example below). Example 4: You use a few brand-name medications (and you do not wish to use any available generic equivalents)...
... You will want to take time to ensure that your chosen Medicare Part D drug plan provides the most economical overall coverage (considering premiums, deductible, formulary coverage, and total monthly cost-sharing.
As an example, let us look at an older example of how a 2015 Medicare drug plan covers three popular brand-name drugs, Lipitor®, Plavix®, and Nexium®.
Back in 2015, the Texas Medicare Part D plan with the lowest monthly premium was the $18.40 Humana Walmart Rx Plan having a $360 deductible. In that same year, the lowest premium Texas Medicare Part D plan with a $0 initial deductible was the SilverScript Choice plan, having a $22.90 monthly premium.
The chart below compares how these stand-alone Part D drug plans covered the three brand-name drugs, Lipitor®, Plavix®, and Nexium®. Notice that the Express Scripts Medicare - Choice plan with a significantly higher monthly premium ($104.30) and a $360 deductible had the lowest estimated total annual costs because it covered most of the medications that were otherwise not covered by some of the lower premium drug plans.
| Medicare Part D Plan Name | Monthly Premium | Initial Deductible | Total Annual Cost* | Number of Drugs on Formulary | Cost-Sharing 30 Day Supply | ||
| Lipitor® | Plavix® | Nexium® | |||||
| Humana Walmart Rx Plan | $18.40 | $360 Tiers 1&2 excluded |
$9,064 | 3,271 | Not on Formulary ($224) | Not on Formulary ($223) | Not on Formulary ($290) |
| SilverScript Choice | $22.90 | $0 | $6,183 | 2,971 | Not on Formulary ($223) | Not on Formulary ($223) | $46 |
| Express Scripts Medicare - Choice | $104.30 | $360 Tiers 1&2 excluded |
$6,149 | 3,453 | Not on Formulary ($224) | $81-$85** (41%-43% co-ins) | $42-$47** |
* Total annual costs include the monthly premiums and the medication cost-sharing, including deductible. Total annual cost estimates using Medicare.gov Plan Finder on 10/25/2015 with CVS selected as the pharmacy.
** Low value is cost-sharing at preferred network pharmacies and high value is cost-sharing at regular network pharmacies.
Example 5: You use generic equivalents for your brand-name medications...
... Again, you will need to calculate the total annual cost considering premiums, deductible, formulary coverage, and total cost-sharing.
As we continue our 2015 examples, we switch to the generic form of Lipitor®, Plavix®, and Nexium®. As you might guess, our most economical Medicare plan changes when looking only at the generics.
Using 2015 Texas Part D plans in our example, the2015 Blue Cross MedicareRx Value was the most economical stand-alone prescription drug plan for this basket of generic medications, even though this plan had a $360 deductible. The 2015 AARP MedicareRx Preferred (PDP) was the most economical plan with a $0 deductible.
The chart below compares the annual costs for the lowest premium 2015 Texas Medicare Part D plan, the lowest premium $0 deductible Texas plan, and the Medicare drug plan with the lowest annual total costs for these generic medications.
| Medicare Part D Plan Name | Monthly Premium | Initial Deductible | Total Annual Cost* | Number of Drugs on Formulary | Cost-Sharing 30 Day Supply | ||
| Atorvastatin Calcium | Clopidogrel | Esomeprazole Magnesium |
|||||
| Humana Walmart Rx Plan | $18.40 | $360 Tiers 1&2 excluded |
$3,426 | 3,271 | $4-$6.80** | $4-$6.50** | Not on Formulary ($254) |
| SilverScript Choice | $22.90 | $0 | $3,385 | 2,971 | $3.00 | $3.00 | Not on Formulary ($253) |
| Blue Cross MedicareRx Value | $63.20 | $360 Tiers 1&2 excluded |
$933 | 3,108 | $0-$5** | $4.54 | $0-$15** |
* Total annual costs include the monthly premiums and the medication cost-sharing, including deductible. Total annual cost estimates using Medicare.gov Plan Finder on 10/25/2015 with CVS as the chosen pharmacy.
** Low value is cost-sharing at preferred network pharmacies and high value is cost-sharing at regular network pharmacies.
Bottom Line: Be sure to look at your total annual medication costs and consider monthly premiums, drug coverage, drug cost-sharing, and initial deductibles. Plus, you may also wish to look at each plans' overall Star Rating to judge the historical quality of the plan and check the pharmacy network (preferred and standard network pharmacies) to ensure that a local preferred pharmacy is nearby.
Need more help? If you need assistance selecting a Medicare Part D or Medicare Advantage plan, telephone a Medicare representative at 1-800-633-4227 (TTY 1-877-486-2048) and ask for assistance.