Medicare defines the parameters of a Part D drug plan each year. Insurance companies offer the drug benefit as either a stand-alone drug plan or included in the Medicare Advantage HMO plan. These drug plans are based on a calendar year and can change from year to year.
Drug plans can have as much as a $320 annual deductible. If your plan has a deductible, you will pay the full amount of your drugs until you have met the deductible. If there is no deductible, you go right to the discount period.
In the discount period, if your drug is on the plan’s formulary, you can receive a 25% discount on the cost of your drug, with the insurance plan absorbing the remaining 75% of the cost of the drug.
However, from the start it’s the actual cost of your drugs (no matter what portion you are paying) that are adding up. Once the annual 2012 threshold of $2930 is reached, you will then be in the gap or donut hole.
Drug plan benefits are available for comparison on www.medicare.gov where you can access and compare stand alone drug plans as well as Medicare Advantage drug plans.