Phases of Medicare Part D: The Deductible

There are many parts to a Medicare prescription drug plan. There are many people that don't know all the parts of the plans so they aren't aware of how to find a plan that will suite their needs. When it comes to looking at different prescription drug plans, people need to understand exactly what each phase of the Medicare Part D plan means and how it will affect them.

The Deductible

The deductible of a Medicare Prescription drug plan are the expenses that has to be paid before the prescription drug insurance begins to pay a portion of the costs. When people enroll into a prescription drug plan that has a deductible, they will be responsible for the cost of those medications until a certain amount was paid before the insurance begins to pay a portion of those costs. For the 2012 benefit year, the deductible has been set to $320.

There are many people that don't think they are covered by their prescription drug plan provider until they have paid their deductible in full. That is not true. When a person enrolls into a prescription drug plan, they are covered under that insurance on their effective date. During the deductible period, members are paying the full negotiated price of those medications instead of a portion of the costs.

What is a Negotiated Drug Price?

A negotiated drug price is the price that is agreed upon between the insurance provider and the drug company. These prices vary with the different insurance companies and different medications. When insured people go to the pharmacy to pay for their prescriptions during their deductible period, they are paying the price that the drug company agreed to instead of paying the retail price.

Retail prices for medications are completely different than negotiated prices and are often more expensive. When a person doesn't have insurance and they get a prescription medication from the pharmacy, they have to pay the price that the pharmacy sets. These prices are not necessarily set to benefit the uninsured customers. There are many people that find the cost of a name brand medication is often more expensive than the prices negotiated by an insurance company.

Deductible Met. Now What?

Each year, the amount of the deductible is changed by the Centers for Medicaid and Medicare Services. For the 2012 benefit year, the deductible amount is set at $320 and all Medicare Prescription Drug Plan providers have to follow that guideline. When a person has paid up to $320 in prescription costs, their prescription drug plan provider will begin to pay for a portion of their medications. Normally when people finish their deductible, the cost to members drop dramatically.

After a person has paid their deductible, they move into the next phase of prescription drug coverage, their initial coverage period.

The importance of a prescription drug plan can't be stressed enough. Although the costs of the medications look expensive, these plans actually save most people more money than they realize. When a person is insured, they are able to pay a set copay or pay the negotiated price of medications instead of the retail prices. When a person is taking multiple medications with no insurance, they quickly find themselves in financial trouble.

Whenever there is a question about prescription drug plans, there should be no hesitation in asking. Many people hesitate to ask their prescription drug plan provider questions because they don't want to sound uneducated. The only way to learn is to ask questions and get a clear understanding of the benefits they pay for. If people can't get a clear understanding of their benefits from their insurance provider, they should call the Centers for Medicaid and Medicare Services. If there are questions, there are answers and explanations that can be given.

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