The cost of Medicare Part D plans can vary between plans. There are programs to help with the costs. Learn more on our Help with Part D Costs page.
Part D drug plans have these different costs: the premium, deductible and copayments.
The premium is the amount you pay each month to the Part D plan for coverage. Each Part D plan has a different monthly premium. If you are on Medicaid or Medicare Savings Program, and select a LIS-approved Part D plan, you should not have to pay any premium.
If you are on VPharm and select a LIS-approved Part D plan, you should not have to pay a Part D premium, but you still have to pay your monthly $15, $20, or $50 premium to the State of Vermont.
The yearly deductible is the amount you must pay out of your own pocket before your coverage begins. This amount is in addition to your monthly premium. The deductibles for 2022 go from $0 to $480.
If you are on Medicaid, VPharm1 or LIS, you should not have to pay a deductible. If you have VPharm2 or VPharm3, you may have to pay the deductible (and copayment) for non-maintenance drugs.
A copayment is money you must pay out of your pocket when you fill your prescription at the pharmacy. Some plans do not have copayments. Other plans may have different copays for different types of drugs. Some plans may have copayments of $25 or more for every prescription. The plan’s drug “formulary” will tell you what copayments you will owe for each drug.
If you are on Medicare and Medicaid, your copayment should not be more than $3.95 for generic or preferred drugs and $9.85 for all other drugs in 2022 for any one covered drug. If you are on VPharm, your copayments will be $1 or $2 for covered drugs.
Coverage gap (“donut hole”)
Medicare Part D coverage is divided into three basic stages:
- the initial coverage period
- the coverage gap (“donut hole”)
- catastrophic coverage
As you make use of Part D benefits, you move through these stages.
Before the Affordable Care Act passed in 2010, you were responsible for paying 100% of the costs for drugs during the coverage gap (donut hole). Now you are responsible for paying 25% of the costs during the coverage gap until you reach catastrophic coverage.
For example: Phoebe has a $25 copayment on her asthma inhaler during her initial coverage period. The full cost of the inhaler is $160. During the coverage gap period, she will owe 25% of the full cost, which is $40.
Remember if you have LIS or VPharm, your copayments will remain the same during all phases of Part D coverage.
Generic vs. brand name drugs
During the coverage gap, the amount you pay for generic drugs will count towards the coverage gap. With brand name drugs, both the amount you pay and any discount on the brand name drugs will count towards the coverage gap. Some Part D plans offer discounts on brand name drugs during the coverage gap.
Learn more about the coverage gap on the Medicare website.