Part D “Out-of-Pocket”

Prescription Drug “Out-of-Pocket” Costs Explained

Prescription drugs can be costly, especially when you’re on a stand alone Medicare Drug Plan. Understanding your out-of-pocket costs is crucial to managing your healthcare expenses. In this blog post, I will define what out-of-pocket costs are and what they include.

Out-of-pocket costs refer to what you pay for your prescription drugs after your insurance or Medicare has paid their share of the bill. This includes any deductibles, copayments, or coinsurance. Some plans have high deductibles, especially for higher-tier drugs, and copayments can be a flat fee or a percentage of the drug’s cost.

In addition to what you pay, out-of-pocket costs can also include payments made on your behalf. These can come from Medicare’s Extra Help program, Coverage Gap Discounts Programs, state pharmaceutical programs, and some charities.

It’s important to note that not everything counts towards your out-of-pocket costs. For example, payments for drugs not covered by your plan or non-Part D drugs (like those received in the hospital) do not count. Your plan premium and payments made by certain programs (like the VA or employer health plans) do not count either.  As a retired Respiratory Care Practitioner, I would like to address those of you who receive their nebulizer medicine from a Durable Medical Equipment (DME) provider.  It’s a great way to get the treatment you need while keeping your copayments down.  It is also an example of getting a medicine under Part B and therefore does not add to your Part D Out-of-Pocket costs. 

If you’re unsure what counts towards your out-of-pocket costs, you can always refer to your plan’s Evidence of Coverage or contact your plan directly. And don’t forget about your “Total Drug Costs” – this includes everything paid for your covered Part D drugs, including what your plan pays and what others pay on your behalf.

Managing your healthcare costs can be overwhelming, but understanding your out-of-pocket costs is a crucial step. If you have any questions or need further assistance, feel free to contact me on my toll free number: 888-883-6074 or email me at:

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