Taking Advantage of Medicare Part DAt first glance Medicare part d seems to present a saving of 75%, but with a closer look we there is a very narrow window of savings in that range.
If you want to take full advantage of the new government medical insurance (given of course if your yearly expenses exceed $2250), then it's important to understand how to calculate how much you will really save. First you need to calculate what you are spending BEFORE Medicare insurance is applied.
Follow These Three StepsStep 1: We begin by taking into account the GROSS amount you spend on prescription drugs. Consider how much you would be spending if there were no insurance, since the actual retail amount is what we need for the calculation.
Step 2: Figure out the month where the retail costs reach the $2250 mark. This will tell you when your medical insurance ends and you enter the "Doughnut Hole" where you have ZERO coverage with basic Medicare part D plans.
IE: You spend $346 (retail each month) X 6.5 = $2249 (Very close to $2250, so it takes you 6.5 months to use up the Medicare part d basic coverage)
Step 3: As a final step, find the total retail amount that you will be spending for the year plus your monthly premiums, then subtract your actual savings. The actual savings with Medicare part d is 75% of the first $2000 after your deductible or in other words $1500 for most people. (If you spend more than $5100 per year then the formula goes to 95% savings)
IE: You spend $346 (retail each month) X 12 = $4152 + ($28 X 12 = $336) = $4488
$4488 - $1500 = $2988 ......your actual savings are close to 34% in this scenario.
It now becomes obvious a 75% savings is nearly impossible with Medicare part d. You actually have to spend exactly $2250 to get the annual 75% savings.
Everyone's situation is different and it's wise to speak to a Medicare specialist for help deciding which plan will be best for your needs. Some plans cover the deductible and the "Doughnut Hole" If your prescription expenses are quite high then you'll need help choosing the right Medical insurance plan.
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