Insurancenic

Medicare Part D is the formal name for Medicare drug plans. Medicare does not itself provide part D coverage. Medicare approves the companies, and the insurance plans, from which you can choose for coverage. Part D is privately administered.

If there are many plans available in your area, you need to know how to compare them. However, before you do that, you must decide whether you want it. It is an optional part of Medicare. You can opt out of your coverage when you are first eligible. The result of that decision is that you will pay a late fee and have higher premiums whenever you do decide to enroll.

To compare Medicare drug plans, you need to compare the total annual cost of each plan. The first component of annual cost is the premium. You typically pay a premium every month. So, to get the annual cost, you will need to multiply the monthly premium times twelve.

The next cost of a plan is the deductible. The deductible is amount that you will pay before the insurance company starts paying. The deductible is the defined on an annual basis, so you will not have to modify this figure to add it to the total annual cost.

The third piece is a little trickier. It is the co-pay. You pay the co-pay amount each time you get a prescription filled. The rest of the cost, the insurance company pays.

To get at your annual co-pay amount, you have to know your annual prescription cost (the total cost, not what you pay) and subtract the annual deductible. From that amount, you need to see how much co-insurance you need to pay of the remaining cost. The formulary defines the amount of co-pay for each medication covered in the plan.

Once you have the total cost for every plan, you can then compare.