Session 1, made you clear about the working of the Medicare Part D Plan in case the person does not enter the donut hole. It had the idea of calculations without the donut hole amount. That was not enough for the exact understanding. So, this part will let you know about the working in case of a person entering coverage gap.
Richard is to spend $4200 on drugs in the year 2010. So, he opts for a Medicare Part D Plan with standard drug benefits & no gap coverage scheme. Then his plan data will go as below:
• $310 to be paid by Richard as an initial Deductible.
• At the first co-payment stage, Richard will pay the 25% of the total cost $2520 [The cost after deducting the initial payment from $2830, the predefined amount to enter gap]. So, the out of pocket cost for Richard before entering the Donut Hole is $632.50 [That is the 25% of the amount including the deductible of Initial payment of $310].
• This makes Richard to enter the coverage gap & making him responsible of paying 100% of the rest of the amount of $1370 ($4200 - $2830)
So the total amount paid by Richard after taking the plan is $310+$632.50+$1370=$3372.50 [Excluding the low monthly premium]. This will be less than the amount that was to be paid if the plan is not chosen. Moreover, If Richard here was applicable for extra help then the cost would be less than what he paid now.
So, this was the working & calculations for the plan of a person who enters the donut hole. Still to be covered in the next session is about the calculation in case the drugs cost is too high.
About this Author
Saurabh Walia is working with http://www.medicareaide.com. MedicareAide expertize in providing the best & up to date information about the part D plans & helps you in calculating the right amount that you will spend on your medications using a Medicare Part D plan. MedicareAide also provides you an additional feature through which you can get response to your single quote, from more than 25 insurance providers. Using the data you can easily figure out the best plan that suits you both in terms of medicines & money.
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