Examples

Juan, age 68, has drug costs of $120 each month ($1,440 for the year).

Juan has high cholesterol, high blood pressure, and arthritis. He takes a brand-name drug and two generic drugs.

Juan wants the convenience of having all of his Medicare benefits (Medicare Parts A, B, and D) provided through one plan. He has decided to change from a stand-alone Medicare Prescription Drug Plan (PDP) to a Medicare Advantage Prescription Drug (MA-PD) Plan that is a Preferred Provider Organization (PPO). Juan realizes that he must use the plan’s network of doctors and hospitals in order to receive the maximum benefit (lowest cost). All of the doctors he currently sees and the hospital he prefers to go to are part of the plan’s network.

With his new Medicare health plan, Juan has:
	A total monthly premium of $110 ($30 is for prescription drug coverage)
	No annual deductible for drug coverage
	Copays of $5 for each generic drug; $30 for each brand-name drug
	Catastrophic coverage at 95% for drug coverage
	A formulary that includes all of his medications
	Convenient pharmacies in the plan's pharmacy network

In addition, because his new health plan covers his Medicare Parts A & B benefits, Juan pays copays of $20 when he sees his primary care physician and $35 when he sees a specialty physician.

Juan is able to drop his Medicare Supplement Plan (Medigap) and save that monthly premium.

Without Insurance, Juan's Annual Cost for His Prescription Drugs: $1,440

Juan's prescription drug costs and savings with his Medicare Health Plan
	Juan Pays	Juan's Plan Pays	Total Annual Rx Drug Cost
Annual Health Plan Premium	$1,320 ($ 110x12 months)	$0
Drug Coverage Portion	($360)	$0
Deductible	$0	$0	$0
2 Generic Drugs	$120 ($5 copay/drug x 12 months x 2 drugs)	$240	$360
1 Brand-Name Drug	$360 ($30 x 12 months)	$720	$1,080
Total Drug-Related Costs	$840	$960	$1,440

Juan PAYS ($360 + $120 + $360) = $840
Juan SAVES ($1,440 – $840) = $600. He also no longer needs to pay a Medigap premium.