Medicare Part D helps pay for a variety of costs related to prescription drug coverage.
A premium is the amount that an individual pays for health and/or drug plans each month. For a Medicare Part D plan, the monthly premium is between $10 and $100. The cost of the premium varies according to location and plan.
The deductible is the amount that an individual must pay before Medicare kicks in. Deductibles for Medicare Part D in 2018 did not exceed $405. Medicare covers approximately 75% of prescription drug expenses after an individual reaches his or her deductible.
An individual is responsible for approximately 25% of prescription drug expenses after he or she reaches the deductible amount and until the copayments and Medicare payments combined reach a maximum amount determined by individual plans.
When an individual and Medicare reach a combined maximum amount, the individual must pay 100% of prescription drug costs. The maximum amount was $3,750 in 2018. This coverage gap is eliminated when total payments for prescription drugs reaches a "catastrophic level." The catastrophic level in 2018 was $5,000. At this point Medicare pays 95% of any other costs on prescription drug coverage in that year.