All of the stand-alone Part D plans and most of the drug plans sold in connection with Medicare Advantage plans (MA-PDs) charge a premium for the drug benefit. The premium amount will depend on where you live and the plan you choose. This premium is in addition to any Part B premium you pay or have withheld from your monthly Social Security check.
Note: In addition to the Part D premium paid to a plan, an income-related monthly adjustment amount is collected by the federal government. For 2014, this extra payment applies only to individuals with incomes above $85,000 and couples with incomes above $170,000 on their last completed tax return. (So, in early 2014 this would be based on their 2012 tax return.)
What will my monthly prescription drug plan premium be?
Every prescription drug plan (PDP) charges a monthly premium to enroll, but the amount varies by plan. In some states, you may find plans charging as little as $10 per month. Other plans charge a lot more. Many drug plan sponsors,
such as Aetna, Cigna, Humana, Prescription Pathway, and WellCare, offer more than one plan option, and price each option differently.
The higher premium plans may have a lower deductible or no deductible at all, and may offer lower co-pays. You should figure out which plans cover your drugs and also compare the co-pays for each drug. The final numbers you should look at are your total expected costs for the year after you add up premiums, co-pays, the deductible, and the risk of falling into the coverage gap.
Plans that fill in some, or all, of the coverage gap (donut hole) are also more likely to have a high premium when compared with those that don’t do this. Still, premiums vary for a number of reasons, and it’s not always true that higher premiums mean lower out-of-pocket drug costs or a bigger formulary. As an example, Table 4 shows the range of premiums charged by PDPs in Arizona in 2014.
Table 4: Prescription Drug Plan (PDP) premiums, cost-sharing requirements, and drug coverage: Arizona