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What is Medicare Part D cost-sharing?


Cost-sharing refers to the portion of your Medicare Part D plan coverage or Medicare Advantage plan coverage that you pay (such as $30 to fill a brand name prescription or $20 to visit a doctor).

Like any insurance, when you need coverage or have a claim, a certain amount of the cost is paid by your Medicare Part D plan (or Medicare Advantage plan) and the remainder of the cost is paid by you (- and, in some situations, some of the cost may be paid by Medicare or the US Government).

Remember that what you pay this year for cost-sharing may not be the same as what your Medicare plan charges for cost-sharing next year.  In fact, most likely, your Medicare plan will change cost-sharing designs each year - meaning you may pay more next year.  You can read more about plan changes in example article here:  Q1Group 2019 Drug Plan Analysis: Examples of how 2019 Medicare Part D plans can change prescription cost-sharing designs.

For instance:
  • Initial Deductible:  During the initial deductible, you will pay 100% of the coverage costs.  So if you purchase a medication with a retail cost of $100, you pay the $100.  After you have met your initial deductible, your Medicare plan will begin to pay a portion of the coverage costs.  So if your plan has a $415 deductible, you pay the first $415 and then your Medicare Part D plan will begin to pay a portion of the costs.  Not all Medicare Part D plans have an initial deductible and the amount of the deductible can vary between plans.

  • Co-Payment:  You pay a flat or fixed amount for a specific medication, no matter how the drug's retail price changes.  For instance, if you buy a medication that usually costs $100, you may only pay a co-pay of $30.  If the medication becomes more expensive and the retail price increases to $500, you will still only pay the $30 co-pay.

  • Co-Insurance:  You pay a percentage of the retail price for a specific medication. If the drug's retail price increases, you will pay more for the same drug. For instance, if you buy a medication that usually costs $100, you may pay co-insurance of 25% or $25.  If the medication becomes more expensive and the retail price increases to $500, you will still pay 25% or $125 for the same medication.  As the retail prices increase for medications, co-insurance costs can increase, so predicting your annual medical spending is difficult (if not impossible).

  • Coverage Gap or Donut Hole Discounts:  Starting in 2020, the cost-sharing in the Donut Hole will be 25% of retail for generic and brand name drugs, meaning, you will pay 25% of retail costs.  Here is a link showing how the Donut Hole discount changes before reaching 25%:  http:/Q1FAQ.com/470.html

  • Cost-sharing in the Catastrophic Coverage phase:  If you spend beyond your Total Out-of-Pocket limit (TrOOP) and exit the Coverage Gap or Donut Hole, you will pay the greater of a flat-fixed price or 5% of the retail cost for generic and brand name medications.






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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.