When looking at a prescription drug plan the first thing that most people look at is how much the plan cost. There are drug plans that cost less than $20. There are also plans that cost more than $100. Conventional wisdom tells us that something that cost $100 has to be better than something that cost $20, but when talking about Medicare prescription drug plans this isn’t necessarily true. You have to look deeper than the premium of the plan to see if it’s the right fit for you.
One important part of a drug plan is the deductible phase of the plan. A deductible is the amount of money you must pay out of your pocket before your plan will begin to pay. For example, if your plan has a $435 deductible you may have to pay the first $435 before the plan will pay. The good news is plans treat deductibles differently. Some plans have deductibles on all tiers of drugs. On some plans the deductible only pertains to tier 3, 4 or 5 drugs but not tier 1 or 2 drugs. Other plans have no deductible at all. The way to know if your plan has a deductible on the prescriptions you are taking is to look at the plan’s Formulary to find your drug’s tier and the Summary of Benefits to see if you have a deductible.
You will also want to know if the plan requires you to pay a coinsurance on any of your prescriptions. A coinsurance is a percentage you will pay on your prescription. A lot of plans have a coinsurance on tier 4 and tier 5 prescriptions. This means if you have a coinsurance of 20% on your prescription, and the prescription retails for $500, you would pay 20% or $100. Next week we will look at copays, formularies and provider networks.
If you have questions regarding any aspect of Medicare or Medicare health plans feel free call us at Alabama Health Guidance (256-648-5710), stop by our office at 885 Florence Blvd (Four Lane Shopping Center) or email me at firstname.lastname@example.org.