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How to live with the Medicare Part D plan that you have selected.
Perhaps one of the greatest challenges - after selecting the "optimal" Medicare Part D plan - is to prepare or budget for the use of the plan.
Many Seniors appear to have developed a budget with respect to their medication costs - allocating a certain portion each month for prescription costs. For some people, the new Medicare Part D may take additional planning because the prescription costs (depending on the plan) may vary greatly from month, simply due to their choice of Medicare Part D coverage.
For instance, let us assume that someone has selected a Medicare Part D plan with a $15 per month premium, a $295 deductible and 25% Co-Insurance (you pay 25% of the retail price of drugs) and their average monthly retail cost of medication is $260. Their monthly costs would be as follows:
January: $15 (premium) + $295 (medication costs toward deductible) = $310 total costs
Feb-Sept: $15 (premium) + $65 ($260 RX costs * 25% co-insurance) = $80 total monthly costs
Oct-Dec: $15 (premium) + $295 (RX costs in Donut Hole) = $310 total monthly costs.
This person would meet their deductible in the first month of coverage (January). Starting in February, this person would pay 25% of $260 or $65 per month for medication. This Co-Insurance coverage would continue until the Donut Hole is reached: in Month 9 ($2700 / $260) or the end of September. Starting in October and continuing through December, the Medicare beneficiary will be again responsible for 100% of their medication costs or $260 per month.
Therefore, this person must be prepared for an initial period (January) where they would pay 100% of their own medication - a second period where they received Co-Insurance coverage - and a third period where they must once again pay 100% of their medication costs. In addition, this person would also be responsible for the monthly premiums for this Medicare Part D plan.
Our suggestion is to plan out your 2009 prescription drug budget now so that you can plan for highs and lows in your prescription drug spending. Once again the key is to eliminate or, at least minimize, the surprises in 2009 and beyond.
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Last updated on: 11/14/2008
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