Huge Medicine Bills? Choose the Cost Effective Part D Plan

Suppose, Greg counts his annual drug cost for the regular medicines which comes out to be $9200. Greg decides to sign up for a Medicare Part D Program in which offers low premium, no deduction and no coverage in Donut Hole period. The working for a plan if the annual drug cost is too high and the total drug cost calculation can be understood with reference to the following Example:

Costing chat for Greg will be: • As there is no deductible cost, Greg pays 25% of the total cost of $2830 [amount set for entering coverage gap for the year 2010]. This means in this level Greg pays $708.

• Now, Greg enters the Donut Hole period. Here he will have to pay the 100% amount for the drugs till he reaches $4550 [Amount to be paid to exit coverage gap for the year 2010]. As Greg already made a payment of $708. So, to exit the gap, he will have to pay another $3842

• By the time Greg exits the Donut Hole period, the total amount of $6672 is already paid by Greg and the Insurance Company [$2830 before entering donut hole and $3842 during the donut hole]. So the remaining cost of $2528 is still to be paid. But Greg is now entitled to pay only the 5% of the remaining cost only and the rest will be paid by the insurance company i.e. Greg pays only $126.40 more.

As we know, without the Medicare plan Greg was to pay $9200. But, using the Medicare Part D Plan, Greg pays: $708 + $3842 + $126.40 = $4676.40 and the fixed low premium every month for the plan. So, you can easily figure it out that how cost efficient is using Medicare Part D plan. You can make the calculations easily and check out what amount wills you have to pay for the Part D plan and how cost effective will it be for you.

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