Your costs for Medicare prescription drug coverage will vary depending on which drugs you use, which Medicare drug plan you join, and whether you get extra help paying for your drug costs. Medicare drug plans may design their plans with different coverage and costs, as long as what their plan offers is at least as good as “standard coverage” described later.

Payments you may make in a Medicare drug plan include the following: 

• Monthly premium--most drug plans charge a monthly fee that varies by plan.  You pay this in additon to your Part B premium.  If you belong to a Medicare Advantage Plan or Medicare Cost Plan that includes Medicare drug coverage, the monthly premium you pay includes an amount for prescription drug coverage.  Some Drug plans charge no premium.
• Yearly deductible—this is the amount you pay for your prescriptions before your plan begins to pay. Some plans charge no deductible.
• Copayments or coinsurance—You pay these amounts for your prescriptions after the deductible. You pay your share and your plan pays its share for covered drugs.
• Coverage gap—Most Medicare drug plans have a coverage gap. This means that after you and your plan have spent a certain amount of money for covered drugs, you have to pay all costs for your drugs while you are in the coverage gap. You must also continue to pay your plan’s monthly premium while you are in the coverage gap.

Each state offers at least one plan with some type of coverage during the gap. However, it’s important to note the following:  

• Plans with gap coverage may charge a higher monthly premium.
• Some plans may offer only generic drug coverage during the gap.
• Even if a plan offers gap coverage, check with the plan first to see if your drugs would be covered in the gap. 

Catastrophic coverage—if you have extremely high drug costs, Medicare drug plans provide coverage called “catastrophic coverage.” This means that once you have paid up to a certain limit for covered drugs in 2009, you only pay a coinsurance amount (like 5% of the drug cost) or a copayment (like $2.25 or $5.60 for each prescription) for the rest of the calendar year.