This can get complicated…so I’ll keep to the basics. Simply, the drug plans are not very friendly to the extremes…meaning the very healthy and the very ill. The former takes no medicines and the latter has a shoe box full of pills. The drug plan works well for the person who takes an average amount of generic medicines with very few name brands. 

Here’s some of the mechanics…

  1. The retail price is $20 and the drug company pays $15 and you pay $5. That’s fair.
  2.  Medicare tracks the total purchase price ($20) and keeps a tally sheet for the year. If you spent $2830 retail then you stand at the door of the donut-hole or gap…whereby you’ll pay 100% for the medicines until you spend another $4050…pushing you through to the catastrophic level where the meds are nominal $2-$5 average. Well you just broke your piggy bank! 
  3. There are ways around the donut hole and a good agent will share these ideas. The agent also has access to the software to see which companies have the better pricing for your mix of medicines.

The Part D drug plan is optional. And for the healthy person who has no prescriptions he may not opt into the program. This decision comes with a penalty to bear.

  • For every month you could’ve had the plan but didn’t there’s a 1% penalty accruing.
  • Say 3 years latter you take meds and want to join…fine…but the 36 months of absence will cost you 36% higher monthly premiums for the rest of your life.
  • Sounds like a penalty for good health.

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