Examples
Clara, age 68, has prescription drug
costs of $250 per month ($3,000 for the
year).
She has high blood pressure, arthritis,
acid reflux, and allergies. She regularly uses five
prescription medications. Clara just learned
that her former employer is discontinuing all
of her retiree health care coverage (medical
and prescription drug).
Clara looked at all of her options and selected a
type of Medicare health plan called a Preferred
Provider Organization (PPO). With this plan,
she could use doctors and hospitals within the
network at a lower cost, but she could also go
outside the network to any doctor or hospital
for a higher cost. Clara’s PPO will cover all of
her Medicare Parts A & B benefits and her
prescription drugs. She will also get benefits
such as dental care and access to a nearby health
and fitness center. She appreciates the exercise
classes that help her control her blood pressure
and acid reflux.
In January, Clara fills her first prescriptions and
pays $100 to meet her annual deductible. After
this she pays copays for each drug. In November,
when the total cost of her drugs (what she has
paid PLUS what the plan has paid) exceeds
$2,700, she enters the coverage gap. Clara continues
to pay just $5 for each generic drug because
her plan covers generic drugs during the coverage gap, but she pays the total cost of her brand-name
drugs while she is in the coverage gap. Even with
these costs, Clara still saves several hundred
dollars over what she would pay without any
insurance.
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