Prescription Drug Coverage
Monthly Premium for Drug Plans
For 2022 Medicare Part D Costs, most drug plans charge a monthly fee that varies by plan. You pay this in addition to the Part B premium. If you’re in a Medicare Advantage Plan (Part C) or Medicare Cost Plan with drug coverage, the monthly premium may include an amount for drug coverage.
- If your income was more than $91,000 ($182,000 filing joint) you’ll pay $12.40 + your plan premium
- If your income was more than $114,000 ($228,000 filing joint) you’ll pay $32.10 + your plan premium
- If your income was more than $142,000 ($284,000 filing joint) you’ll pay $51.70 + your plan premium
- If your income was more than $170,000 ($340,000 filing joint) you’ll pay $71.30 + your plan premium
- If your income was more than $500,000 ($750,000 filing joint) you’ll pay $77.90 + your plan premium
Deductibles vary between Medicare drug plans. Some Medicare drug plans don’t have a deductible.
- No Medicare drug plan may have a deductible more than $480 in 2022.
Copayments & Out-of-Pocket Threshold
Once your deductible is met, you’ll pay a coinsurance (copay) for prescription drugs. Note that the amount of your copay may change during the benefit period, if the drug price fluctuates.
- Initial coverage limit is $4,430 (plan pays 75% – you pay 25%)
- Once you and your plan pay this amount, you’ll continue to pay 25% of the cost of your prescriptions drugs until you reach your threshold
- Annual out-of-pocked threshold is $7,050
Coverage Gap – Donut Hole
Once you and your plan have spent $4,430 on covered drugs in 2022, you’re in the coverage gap (a temporary limit on what the plan covers). Even though you’ll only pay 25% for both brand name and generic drugs at this point, almost the full price of the drug (except for what the plan pays) will count as out-of-pocket costs to help you get out of the coverage gap.
- The manufacturer pays 70% of drug costs
- The plan pays 5% of drug costs
- You pay 25% of drug costs
- The plan also pays 75% of a dispensing fee, you pay 25% of the dispensing fee
Once you reach your threshold ($7,050), you are out of the coverage gap (donut hole) and you’ll automatically get catastrophic coverage. This assures you only pay a small coinsurance amount or copayment for covered drugs for the rest of the year.
- You’ll pay 5% or a small copay (whichever is greater) of the cost of your medications for the rest of the year.
- Your plan pays the rest