Medicare doesn’t cover everything. If you need certain services that Medicare doesn’t cover, you’ll have to pay out-of-pocket unless you have other insurance to cover the costs. Even if Medicare covers a service or item, you generally must pay deductibles, coinsurance and copayments.
Medicare Advantage Plans
Your out-of-pocket costs in a Medicare Advantage Plan depend on the following:
- Whether the plan charges a monthly premium in addition to your Medicare Part B premium
- Whether the plan pays any of the monthly Medicare Part B premium. Some plans offer this option, usually for an extra cost
- Whether the plan has a yearly deductible or any additional deductibles
- How much you pay for each visit or service (copayments)
- The type of health care services you need and how often you get them
- Whether you follow the plan’s rules, like using network providers
- Whether you need extra coverage and what the plan charges for it
- Whether the plan has a yearly limit on your out-of-pocket costs for all medical services
- Monthly premium
- Most drug plans charge a monthly fee that varies by plan. You pay this in addition to the Medicare Part B premium. If you belong to a Medicare Advantage Plan (like an HMO or PPO) or a Medicare Cost Plan that includes Medicare prescription drug coverage, the monthly premium may include an amount for prescription drug coverage.
- Yearly deductible
- Amount you pay for your prescriptions before your plan begins to pay. Some drug plans don’t have a deductible.
- Copayments or coinsurance
- Amounts you pay at the pharmacy for your covered prescriptions after the deductible. You pay your share, and your drug plan pays its share for covered drugs.
- Coverage gap
- Most Medicare drug plans have a coverage gap. This means that after you and your drug plan have spent a certain amount of money for covered drugs, you have to pay all costs out-of-pocket for your prescriptions up to a yearly limit. Your yearly deductible, your coinsurance or copayments, and what you pay in the coverage gap all count toward this out-of-pocket limit. The limit doesn’t include the drug plan’s premium or what you pay for drugs that aren’t on your plan’s formulary.
To learn more about your costs in specific Medicare Advantage Plans, contact the plans you’re interested in for details.
Exact coverage and costs are different for each Medicare drug plan, but all plans must provide at least a standard level of coverage set by Medicare.
The following describes the payments you make throughout the year in a Medicare drug plan. Your actual drug plan costs will vary depending on the prescriptions you use, the plan you choose, whether you go to a pharmacy in your plan’s network, whether your drugs are on your plan’s formulary, and whether you qualify for Extra Help paying your Part D costs.
There are plans that offer some coverage during the gap, like for generic drugs. However, plans with gap coverage may charge a higher monthly premium. Check with the drug plan first to see if your drugs would be covered during the gap.