Latest / Smart Coverage. Real Advice.: Medicare / How Much Does Medicare Drug Coverage Really Cost in North Carolina, and What Affects Your Price?
Transcript
- Tanya: How much does Medicare drug coverage actually cost, and what are all the pieces that go into it? If you’re getting ready to enroll or just planning ahead, you’ll want to know what to expect. Tanya: Welcome to Smart Coverage. Real Advice., the insurance podcast from The Jordan Insurance Agency. I'm Tanya, your host, and I'm here with Billy Jordan, a licensed insurance agent and the president of The Jordan Insurance Agency. Billy: Glad to be here, Tanya. A quick disclaimer: we're not affiliated with or endorsed by Medicare or any government agency, and this is general education, not advice for your situation. Now, let's get into it. Tanya: So, Billy, what are the main costs someone needs to look at with Medicare drug coverage? Billy: The main costs you’ll see with Medicare drug coverage, also called Part D, are the monthly premium, the deductible, and your share of the cost when you pick up a prescription—either a copayment or coinsurance. Your total out-of-pocket will depend on which plan you pick. According to medicare.gov, each plan sets its own amounts for these, so it can really vary. Tanya: Let’s break those down. What’s a premium, and does everyone pay the same amount? Billy: The premium is what you pay every month just to have drug coverage, whether or not you use any prescriptions. The amount depends on the specific plan you choose. Some people may pay more depending on their income, as noted on medicare.gov. Tanya: How does that income adjustment work? Is it a huge difference? Billy: If your income is above certain levels, you may pay an extra amount on top of your plan’s premium. Medicare looks at your tax return from two years ago to determine this. For most people, it doesn’t apply, but it’s something to be aware of. Tanya: What about the deductible? Is that like what we see with regular health insurance? Billy: Yes, it’s similar. The deductible is what you pay out of pocket for your prescriptions each year before your plan starts to pay its share. Not all plans have a deductible, and those that do can’t set it above a certain limit. For example, in twenty twenty-seven, no Medicare drug plan can have a deductible higher than seven hundred dollars, according to medicare.gov. Some plans have lower deductibles, or even none at all. Tanya: So you could get a plan with zero deductible? Billy: That’s right. Some plans offer no deductible, but other costs may be different. It’s about weighing the different costs and what works for your situation. Tanya: And you mentioned copayments and coinsurance. What’s the difference there? Billy: Good question. A copayment is a fixed dollar amount you pay for a prescription. Coinsurance is a percentage of the drug’s cost. Which one you pay depends on the plan and the specific drug. Tanya: Can you give me an example of how all these costs might add up for someone in North Carolina? Billy: The exact amounts will depend on the plan you choose. Generally, you pay the monthly premium, any deductible if your plan has one, and then either a copayment or coinsurance when you fill a prescription. The total can vary a lot depending on your medications and the plan’s structure. Tanya: That makes sense. What’s a common mistake people make when picking a drug plan? Billy: Some people look only at the premium and pick the lowest one, but if the drugs they take aren’t covered, or the copays are high, they could end up paying more overall. It’s important to check if your medications are covered and look at all the costs, not just the monthly premium. Tanya: According to medicare.gov, there’s also a late enrollment penalty for drug coverage. How does that work? Billy: If you don’t sign up for Medicare drug coverage when you’re first eligible, and you go without it for sixty-three days or more, you could pay a penalty. That penalty is added to your premium, and it stays with you as long as you have Part D coverage. Even if you don’t take any medications now, medicare.gov suggests considering a plan to avoid that penalty. Tanya: So, it’s not just about what you need right now, but what could happen later. Billy: Exactly. You might be healthy today, but if you need a medication next year and don’t have coverage, not only will you pay out of pocket, but you could also face that penalty for as long as you have Medicare drug coverage. Tanya: What about changes in drug prices or what you pay at the pharmacy? Do those numbers move around? Billy: Yes, they can. Plans can change their copays, coinsurance rates, or which drugs they cover each year. Plus, the price of a medication itself can go up or down. That’s why it’s important to keep an eye on your plan and make sure it still fits your needs. Tanya: Three things to remember. One, your total Medicare drug costs include the premium, deductible, and what you pay at the pharmacy, and these vary by plan. Two, picking the cheapest monthly premium isn’t always the best move—look at your total costs and make sure your medications are covered. Three, enrolling late can mean a penalty that sticks around, so consider signing up even if you don’t need prescriptions right now. Tanya: For a personalized look at your situation, book a free thirty-minute chat with Billy and his team at thejordaninsuranceagency.com/podcast. Billy: I'm Billy Jordan with The Jordan Insurance Agency. Until next time, take care. Tanya: Thanks for listening to Smart Coverage. Real Advice. from The Jordan Insurance Agency.