Prescription costs and coverage are a major concern for many people, especially as healthcare expenses continue to rise. As you approach Medicare eligibility, it's important to understand how prescription drug coverage works so you can make informed decisions about what plan will best suit your needs. Choosing the right Medicare plan is essential to getting the medications you need at the most affordable cost. In this blog, we’ll break down how Medicare prescription deductibles work and what to consider when selecting a plan.
What is a Prescription Deductible?
A prescription deductible is a predetermined amount of money you pay out of pocket before your insurance will pay for covered medications. Deductibles are a form of cost-sharing that help distribute healthcare and prescription expenses between you and your insurance provider.
For 2025 the Medicare Part D standard deductible is $590. Depending on your prescription drug coverage, your deductible may be less than the standard but will not exceed $590. For example, if your deductible is $590, you first need to pay $590 out of pocket before your insurance begins to pay for a portion of the drug’s cost. This does not necessarily mean that you pay the $590 up front right away, it all depends on the retail cost of your prescribed medication(s). The deductible is also a one-time fee for any of the medications that are of the tier level affected by the deductible. It is not a deductible per medication.
The Medicare Part D standard deductible changes annually to keep up with rising prescription drug costs and inflation. The Center for Medicare and Medicaid Services (CMS) adjusts it to ensure the program remains financially sustainable while reflecting changes in medication expenses.
Medicare plans that provide prescription drug coverage are on an annual contract. Therefore, a deductible typically presents itself to individuals at the beginning of the year or at the time a higher-cost medication is picked up, which could be halfway through the year.
For the latest on Part D deductible amounts, you can refer to Medicare.gov
Does Original Medicare Cover Prescription Drug Costs?
When becoming eligible for Original Medicare, Original Medicare includes Part A (hospital) and Part B (medical). It does not include Part D (prescription drug coverage). You’ll need to purchase a Medicare Part D plan for prescription drug coverage. Medicare Part D is a prescription drug plan (PDP) you buy from a private insurance company that has a contract with Medicare.
You can also enroll in a Medicare Advantage Plan which often includes prescription drug coverage. Drug coverage will depend on your specific plan. Whether or not prescription costs are counted toward your deductible will depend on your specific plan as well.
How Much is My Prescription Deductible with Medicare?
Each Medicare plan is slightly different, as there is no universal standard for prescription costs. Deductibles will vary between prescription drug plans; some plans may have no deductible at all. For clarification on your prescription deductible, contact our client service team today.
How Can I Sign Up for Medicare Part D?
To sign up for Medicare Part D, you must either enroll in Original Medicare at the same time or already be enrolled in at least Medicare Part A. You can then sign up for Medicare Part D during open, annual, or a special enrollment period. Our team of experienced licensed agents are available to assist you in determining what plan is most suitable for your individual needs.
When shopping for Medicare Part D plans, you should consider the following:
- The frequency of prescription medication you currently take
- The amount of prescription medication you currently take
- The cost of prescription medication without insurance you currently take
For a more detailed breakdown on Medicare Part D and other considerations, please reference Medicare.gov’s page on drug plans.
Medicare Guidance You Can Count On
Choosing the right prescription drug coverage can be overwhelming. If you are taking no medications or very few, you'll want a Part D plan that is inexpensive but has adequate coverage if you were to end up needing more expensive prescriptions. If you are taking any medications or costly brand-name prescription drugs, it's even more essential to ensure that the Medicare Part D plan you choose covers your medications and helps lower your prescription costs.
At Twin City Underwriters, it's our goal to provide Medicare recipients with all of their Medicare plan options and the Medicare education they need to make informed decisions with their healthcare choices. If you have questions about signing up for Medicare or your existing Medicare coverage, don't hesitate to reach out to our team today.
This is an updated blog that was originally published in 2020.
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