Medicare Part D Information

Medicare logoIn order to meet most prescription drug needs, Medicare allows private insurance companies to issue Medicare-approved prescription drug plans. These drug plans do not cover all prescription drugs. Beneficiaries should choose the plan that best covers their own prescription drug needs. Here are some basic rules to remember.

Drug Costs- Most Medicare-approved drug plans require that beneficiaries pay an annual deductible before the plan pays anything (see the maximum amount in row "A" in the chart below). However, some drug plans have no annual deductible.

Beneficiaries often pay 25% of the drug costs after the deductible has been met (see row "B" in the chart below). Some drug plans charge less than 25%.

Beneficiaries often pay a higher amount of the drug costs once he or she reaches the coverage gap (donut hole - see row "C" in the chart below). Some drug plans charge less during the coverage gap (donut hole).

Beneficiaries usually pays 5% of the drug costs after their annual drug costs exceed the amount described row "D" in the chart below. Some drug plans charge less after the coverage gap.

Your Drug Costs in 2017
These are maximum amounts allowed, but some plans require less
If annual drug
cost is between...
You pay... Up to a
maximum of...
Your cost  plus the monthly premium...
A. $0 to $400 100% Up to $400 Up to $400
B. $400 to $3,700 25% Up to $825 Up to $1,225
C. $3,700 to $7,425 51% on generic
& 40% on
brand name
Up to $3,725 Up to $4,950
D. Over $7,425 5% No maximum The first $4,950 plus either 5% of the drug cost or $3.30 for generic and $8.25 for brand name drugs, whichever is higher

(Updated Mar 13, 2017)

Extra Help, also known as Low-Income Subsidy or LIS, is financial assistance for the costs of drug plans for Medicare beneficiaries with low and moderate income & assets. There are six levels of coverage as described below.

  1. Institutionalize & CCP individuals with both Medicare and Medicaid, who live in long-term care facilities (Nursing Home) or receive services under a Medicaid waiver, such as CCP in Illinois, pay the following amounts in 2017:
  2. Medicare & Medicaid or Full Dual Eligible, up to 100% FPL for individuals who live in the community, with incomes up to $1,005, and assets up to $2,000 (income up to $1,353 & assets up to $3,000 for couples- income amounts include $20 disregard) pay the following amounts in 2017:
  3. Medicare with Medicare Savings Program, up to 150% FPL for individuals with incomes up to $1,508 and assets up to $8,890 (income up to $2,030 & assets up to $14,090 for couples- income amounts include $20 disregard) who apply for LIS Extra Help (automatically received if on SSI) pay the following amounts in 2017:
  4. Medicare only & lower assets, up to 135% FPL for individuals with incomes up to $1,357 and assets up to $8,890 (income up to $1,827 & assets up to $14,090 for couples- income amounts include $20 disregard) who apply for LIS Extra Help (automatically received if on SSI) pay the following amounts in 2017:
  5. Medicare only & higher assets, up to 135% FPL for individuals with incomes up to $1,357 and assets up to $13,820 (income up to $1,827 & assets up to $27,600 for couples- income amounts include $20 disregard) who apply for LIS Extra Help (automatically receive if on SSI) pay the following amounts in 2017:
  6. Medicare only & higher assets, up to 150% FPL for individuals with incomes between $1,357-$1,508 and assets up to $13,820 (income between $1,827-$2,030 & assets up to $27,600 for couples- income amounts include $20 disregard) who apply for LIS Extra Help pay the following amounts in 2017:

Premium Costs for Higher Income Beneficiaries- The amounts below are the monthly Drug Plan's Premium (DPP) amount plus an additional amount for people with higher incomes.

Your Medicare Drug Plan Monthly Premium in 2017
You Pay... If Your Annual Income is...
Individual Couple
Drug Plan's Premium (DPP) $85,000 or less $170,000 or less
DPP + $13.30 $85,001 to $107,000 $170,001 to $214,000
DPP + $34.20 $107,001 to $160,000 $214,001 to $320,000
DPP + $55.20 $160,001 to $214,000 $320,001 to $428,000
DPP + $76.20 Above $214,000 Above $428,000

Sources: Medicare Costs at a Glance & Social Security POMS

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