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What Does It All Cost

All Medicare plans have some level of cost-sharing. Here are some of the costs you might be responsible for paying.

Premium

A fixed, monthly amount you pay your insurer for your plan coverage.

Deductible

What you pay before your insurer begins to pay its share of the costs. Some part C plans charge an annual deductible for medical and/or prescription drug costs.

Copay

A defined amount you pay each time you receive care. Copays vary by services and benefits.

Coinsurance

A percentage you pay for medical services after you’ve met your deductible. Insurers set their own percentages.

Out of pocket maximum

Medicare Advantage plans include an annual limit on how much you pay for covered services. When you reach that limit, you don’t pay additional costs for covered services. Original Medicare doesn’t include this limit.

Part APart BPart CPart DMed Supp
PremiumNo premium if you or your spouse worked and paid Medicare taxes for at least 10 years.Vary depending on income.Vary by Plan. Some plans have no premiums.YesYes, varies by plan.
DeductiblePart A deductibles apply to each inpatient stay. YesVary by PlanVary by PlanSome Plans
CopayVary by service and length of careNoYesVary by PlanVary by Plan
CoinsuranceNoYesYesVary by PlanVary by Plan
Out of Pocket MaximumNoNoYesNoNo

Breaking Down Medicare Part D Cost Sharing for 2021

There are several stages of cost sharing with Part D plans. Most Medicare drug plans have a coverage gap, often referred to as the Medicare “donut hole.” In the coverage gap, there is a temporary limit on what the plan covers.

Deductible
stage

Patient pays

*varies by plan

Initial
coverage

Patient pays

Copay/Coinsurance
varies by plan

When total drug costs reach:

2020: $4,020

2021: $4,130

Enter Coverage Gap

Coverage
Gap

Patient pays
Brands

25%

Generic

25%

When Out-of-Pocket
costs reach:

2020: $6,250

2021: $6,550

Exit Coverage Gap

Catastrophic
coverage

Patient pays
Brands:

2020: Greater of
$8.95 or 5%

2021: Greater of
$9.20 or 5%

Generics:

2020: Greater of
$3.60 or 5%

2021: Greater of
$3.70 or 5%

Part D Formularies and Your Costs

Part D plans have a drug list, or formulary, that shows all the brand-name and generic drugs it covers.

Many plans have a tiered formulary, where drugs are divided into groups called "tiers".

In general, the lower the tier, the lower the cost to you.

Generic drugs typically fall into Tier 1.

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Last updated 10/01/2020