Medicare Part D Cost: Paying for Coverage
What are the out-of-pocket costs for standalone Medicare prescription drug coverage?
You pay a monthly premium to your plan. You also pay part of your pharmacy drug costs and Medicare (your plan) pays part of the pharmacy drug costs.
Your costs will vary depending on which plan you choose. However, your plan must, at a minimum, provide a standard level of Medicare prescription coverage.
How does the 2014 Standard Medicare Part D work?
The Standard Medicare Part D program works like this:
- If You pay a monthly premium.
- Deductible Stage - You pay a $310 deductible, which means that you will pay 100% of your discounted prescription costs until you meet this deductible amount.
- Initial Coverage Stage - After you meet your deductible, you have initial coverage, in which you pay 25% of discounted prescription drug costs up to a predetermined limit. For 2014, this amount is $2,850 and is based upon total drug costs (what both you, and others on your behalf, and your Part D plan pay)
- Coverage Gap Stage - After your yearly total drug costs reach $2,850, you move into the coverage gap stage. For 2014, you will pay 47.5% of the manufacturer’s discounted brand-name drug price and 72% of generic drug costs. You’ll also pay 47.5% of any dispensing fees and vaccine administration fees.
If you are receiving Low Income Subsidy "Extra Help," these discounts are not applicable — you already have coverage through the gap.
- Catastrophic Coverage Stage- You will remain in the coverage gap until your total out-of-pocket costs reach $4,550, at which time you move into the catastrophic stage for the remainder of the calendar year.
- 5% of the discounted prescription drug costs or
- $2.55 copay for generic (including brand drugs treated as generic) or $6.35 copay for all other drugs
- These values are set by Medicare on an annual basis.
You'll pay the higher of:
Are there any cost breaks for married couples?
No. Medicare requires each spouse to pay separate premiums, deductibles and copays and coinsurance for prescription drug coverage and will reach each level of coverage according to his or her own drug costs over each calendar year.
Is there an extra Medicare Part D premium amount because of my income level?
Most people will pay the standard monthly Part D premium. However, you may have to pay an extra amount because of your annual income. Singles or married individuals filing separately whose income is $85,000 or above, and couples with an income of $170,000 will pay the extra amount.
If you are impacted, the Social Security Administration (not your Medicare Part D plan) will send you a letter telling you what the amount will be and how to pay it. This extra amount must be paid separately and cannot be paid with your monthly Part D premium.
How can I pay the plan premium?
There are three ways you can pay your plan premium.
Option 1: By check
You may decide to pay your monthly plan premium directly to our Plan with a check or money order made payable to Cigna Medicare Rx (PDP) and mail it to:
Cigna Medicare Rx
P.O. Box 747102
Pittsburgh, PA 15274-7102
You may not drop off a check in person. Your premium check must be received by the 1st day of the covered month (for example, your payment must be received by January 1st for January coverage).
Option 2: By direct debit or credit card
Instead of paying by check, you can have your monthly plan premium automatically withdrawn from your bank account or charged directly to your credit or debit card. To make this election, you must complete and sign the appropriate form in your Welcome Kit and return it to Cigna Medicare Rx. You can call to request the paperwork, but you will not be able to make this election by phone.
Option 3: Taken out of your monthly Social Security/Railroad Retirement Board benefit check
You can have the plan premium taken out of your monthly Social Security or Railroad Retirement Board benefit check. For more information on how to pay your monthly plan premium this way, contact Cigna’s Customer Service at 1-855-391-2556 (TTY/TDD users call 711) 8 am to 8 pm local time, 7 days a week. We will be happy to help you set this up.
What is financial help?
Medicare provides assistance, known as Extra Help, in paying for prescription drug costs for those with limited income and resources.
If you qualify, you will receive help paying for any Medicare drug plan's monthly premium, annual deductible (if applicable) and prescription copays or coinsurance. This Extra Help will count towards your out-of-pocket expenses.
How do I know if I qualify for financial help?
People who receive full Medicaid benefits are automatically eligible for Extra Help with their drug costs and do not need to apply separately for the Extra Help. Medicare will mail a letter to people who automatically qualify for this assistance.
People who receive any help from Medicaid paying their Medicare premiums or receive Supplemental Security Income automatically receive Extra Help and do not need to apply separately. However, these individuals will need to enroll in a Medicare prescription drug plan.
Those who do not receive assistance from Medicaid but have limited income and resources are encouraged to apply for Extra Help and enroll in a Medicare drug plan. To receive assistance with the Medicare drug benefit, the following steps must be completed:
- Apply for Extra Help based on your income and resources; and
- Sign up for a prescription drug plan to begin using the benefit.
How can I get Extra Help with my prescription drug plan costs?
If you qualify for Extra Help with your Medicare prescription drug plan costs, your premium and costs at the pharmacy will be lower. When you join Cigna Medicare Rx, Medicare will tell us how much Extra Help you are getting. Then we will let you know the amount you will pay.
If you are not getting this Extra Help you can see if you qualify by calling 1-800-MEDICARE (1-800-633-4227). TTY/TTD users should call 1-877-486-2048. You can also submit an application online at www.ssa.gov.
You may also receive help paying for your Part D prescription drugs through a State Pharmacy Assistance Program (SPAPs). Many states help you pay for your prescription drugs through SPAPs based on financial need, age, or medical condition. Since states can have different rules, check with your State Health Insurance Assistance Program.