For Medicare Part D, why would someone pick a plan with a high total cost?
Answered by 69 licensed agents
When I’m helping someone with Medicare Part D, they might pick a plan with a higher total cost if it covers their specific meds at a lower out-of-pocket rate—especially pricier ones that’d hurt more under a cheaper plan. It’s a choice I’ve seen work for clients with chronic conditions needing brand-name drugs, where the broader formulary and lower copays justify the premium. Now, with the Inflation Reduction Act’s $2,000 cap, that strategy’s less critical and not used as much since the max exposure’s locked in either way.
I don't ever recommend selecting a Part D plan based on premium alone. The only rational way to identify the optimal Part D plan for a client is to base it on the meds they are talking regularly. Once I have the medication list, I enter it into my planning tool so I can see total cost, meaning premium + out of pocket costs. Sometimes, depending on the meds, the premium can be as low as 1.80/mo or it can be 115/mo. You must look at total spend and not premium alone!
It largely depends on the formulas and the tier level of the medication. If someone is only taking a few generic drugs, a lower-cost PDP is sufficient, but if they are using more expensive or specialty medications, the more costly PDPs tend to be more cost-effective. Reviewing PDP plans each year during AEP is very important.
Hi. Thanks for watching. So my name is Steve. I'm the husband, half of the husband and wife Medicare team. Thanks for watching. The question today is about Medicare Part D, which is the prescription piece of Medicare. Why would someone pick a plan with a high total cost?
Well, here's the thing with the Part D drug plans, it really has to do with what you need. What drugs and prescriptions do you need to have covered? You need to make sure your Part D drug plan covers your prescriptions on their formulary. If they're not on their formulary, they're not going to cover it.
So sometimes if you take expensive drugs or something in maybe tier four or tier five, which is usually where brand name drugs fall, some of the higher cost brand name drugs, you're going to need to spend a little more every month for your Part D drug plan. They would cover those drugs, but really, it's a math problem you need to solve. I’ve said this 100 times. You need to find an independent Medicare advisor that only does Medicare because you can't be an expert at everything. Find somebody local because they know the market, they know the area, and lean on their experience.
In my opinion, the only reason someone might pick a higher total cost is because of brand loyalty. Many people have a company when they are on their employer insurance and they think it's easier to just stay with that company. This may or may not be a good strategy depending on where you live and what your needs are. Some carriers that are big in the Under 65 space may not be as strong in the Medicare space. They are two separate businesses. I suggest people on Medicare find a local broker who is familiar with their area and can guide them on the proper carriers for their individual situation.
Prescription Drug programs are designed to work with Medicare supplements. PDP plans vary from plan to plan. Most are similar in what the deductible and cost.
Companies charge different amounts for their plans. I wouldn't pay more if there is a cheaper one and the medication is on that drug companies formulary. This year if your on 20 different medications, the maximum that you can be out of pocket for medications is $2,000 for the year.
Voss Speros, Greek god of Medicare, talking about Medicare. So the question is, "Am I eligible for a special enrollment period if I lose my employer coverage?" If you're over 65 and you've opted not to go on Medicare and that coverage drops, yes, you can go on. You get a special election period to go on Medicare due to loss of coverage if you are retiring and you're going on Part B for the first time. Your retiree SEP or loss of coverage is if you're dropping the plan. So yes, if you have an employer plan and you're dropping it, yes, if you move out of your plan area and you're on an Advantage plan, you get an SEP to pick a new plan. If your Advantage plan drops entirely, you can go on a supplement plan and you get an SEP for loss of coverage. So yes, there is a loss of coverage SEP, a special election period to help you pick plans. Give us a call if you have any questions. We'll be more than happy to help.
When purchasing stand alone Medicare prescription drug plans, each have different prices but also different formularies or medication lists. It is importantly to check the formularies and compare pricing and coverage before jumping into a less or more expensive plan.
Here's a good one. For Medicare Part D, why would someone pick a plan with a high total cost? I have no idea why someone would do that. Medicare Part D is your prescription drug plan. There are many of those out there. I deal with it every day here at my State Farm agency on Kelly Street in Manchester, New Hampshire. I actually bring people in with a list of their prescriptions, and I log on and save them a ton of time, effort, and mistakes by helping them pick and choose the Medicare Part D plan. There are many plans out there now. If you're just on generic drugs, like a lot of my clients, there are plans that are zero premium and zero out of pocket. So work with someone like myself. In fact, I'd be glad to help you. I did two plans today. So again, I'm sorry. I don't know why anybody would pick a higher total cost. I'll give you a perfect example. A client last week that's been with me for years was on another company's drug plan, Medicare Part D, and they were spending $48 a month. We switched their plan, which covered all their prescriptions. They have a zero premium and a zero deductible. So they're making out much better. Let me help you.
Lower Drug Costs (Copays/Coinsurance): A plan with higher premiums might have much lower copays or coinsurance for your specific, costly medications, leading to significant savings compared to a cheap plan where those drugs cost a fortune.
Comprehensive Drug Lists (Formulary): High-premium plans often cover more drugs, especially specialty or brand-name medications, with fewer restrictions (like tier placement) than budget plans.
$0 Deductible Plans: Some higher-premium plans waive the deductible, meaning you pay less upfront and start getting lower drug costs immediately, rather than paying full price for drugs until a deductible is met.
Preferred Pharmacy Networks: They might offer lower costs at preferred pharmacies, which is crucial if your preferred pharmacy isn't in a cheaper plan's network.
Predictable Costs: For people with chronic conditions (like diabetes or cancer) needing many expensive drugs, a higher-premium plan provides more stability, ensuring costs don't skyrocket, especially with the new out-of-pocket cap.
Smoothing Costs: The Inflation Reduction Act allows spreading drug costs over the year (Medicare Prescription Payment Plan), which benefits those who hit the annual $2,000 (soon $2,100) out-of-pocket limit early in the year, making higher premium plans more attractive for predictable monthly payments.
In essence, it's a trade-off: You pay more monthly (premium) to potentially save much more throughout the year on your actual prescriptions.
I don’t know. My thought is that you should look at how much the premium is for that part D plan, and compare that with the predicted yearly total cost for all your meds. If the lower premium plans have a high medication cost it may not be worth it for the upfront savings. Most brokers, including myself, have a tool in which we will plug in your medications And see what those would cost on each individual part D plan. I like to look at all of my costs to see the big picture.
Sometimes a plan with a higher total cost actually saves you money in the long run. For example, if it has stronger coverage for expensive prescriptions, lower copays at the pharmacy, or a broader network of preferred pharmacies, your overall out-of-pocket costs can be less even if the monthly premium is higher. It’s all about matching the plan to your specific medications and needs.
By picking a plan with high monthly premiums you may be able to cut your overall cost by reducing copayments and deductibles. It is best to go over your formulary （list of prescriptions taken） and find out what is the most inclusive and best overall coverage and cost each year. As your prescription coverage changes you may want to change plans accordingly during the AEP （Annual Enrollment Period) each year.
Sometimes a Part D plan with a higher total cost actually makes sense because of the medications someone takes. A plan might have a higher premium, but cover certain prescriptions at a much lower copay or provide better coverage for expensive drugs. When that happens, the higher monthly cost can be offset by lower out-of-pocket spending over the year, especially for people who take brand-name or specialty medications.
It might seem odd, but sometimes a higher total cost plan actually saves money overall—especially if it offers better coverage for expensive or brand-name medications. A plan with a slightly higher premium might have lower copays, better formularies, or preferred pharmacies that reduce what you pay out of pocket throughout the year.
That’s why it’s important to look at the total annual cost, not just the monthly premium. My team reviews these details with every client to make sure the plan fits their actual medication list and budget.
The most common reason is that a higher premium plan may place your specific medications on lower cost tiers, meaning your overall annual spending including premiums and drug costs is actually less than a cheaper premium plan that covers your medications poorly. Another reason is pharmacy access, because some plans have preferred pharmacy networks where your costs are significantly lower, and if your preferred pharmacy is in that network a slightly higher premium plan could save you money overall. Formulary stability is also a factor, as some plans have a track record of keeping medications covered consistently year over year rather than making frequent formulary changes. The only way to know which plan truly costs you the least is to run a full comparison using your complete medication list that accounts for premiums, deductibles, copays, and pharmacy selection together, rather than choosing based on the monthly premium alone.
Part D plans with higher monthly premiums are normally more beneficial in having coverage for expensive specialty drugs. You may also save on copays and deductibles
It depends. There is a Part D premium and a cost of drugs. That number combined equals the total cost. When picking a drug plan that is the number to look out for. Who has the best total cost. That number includes any premiums, cost of medications and deductibles.
Medicare Prescription Drug pricing is very complex. My word of advice as someone who works with Medicare clients every day, don't ever shop Part D prescription drug plans by the plan's premium. A higher premium plan in some cases may be your best option.
In order for you to find the best plan for your prescription drug coverage, I suggest working with an advisor or use a self-help tool that takes into account the many variables that go into calculating your estimated total annual drug cost. These variables include not only your specific medications, dosages and quantities, but also the monthly premium for the plan, any deductibles in the plan, the plan's co-pays by Tier and the government's $2000 maximum out of pocket calculation. For people who have lots of prescriptions and expensive prescriptions, the plans with higher premiums will likely be a better fit since some high premium plans have no deductibles, and this makes a difference.
If you find prescription drug pricing complicated, it is! Be sure to do the analysis before choosing your plan. Choose the plan that provides you with the lowest estimated annual drug cost!
This is a great question. While most people gravitate toward the lowest premium or lowest total cost, there are several strategic reasons you might intentionally choose a Medicare Part D with a higher total cost. 1. Specific Medication Coverage: Many higher-cost Part D plans offer better formularies or more favorable tiering for expensive brand-name or specialty drugs. 2. Lower Out-of-Pocket Costs for Frequent Users: such as someone taking multiple medications, a plan with a higher premium but lower copays, coinsurance, and deductibles can save them money over the year. 3. No or Low Deductible: Some higher-cost plans waive the Part D deductible (up to $545 in 2025), which benefits people who start using their benefits early in the year. 4. Pharmacy Network Flexibility: Some plans charge more but offer broader pharmacy networks or preferred pricing at more convenient locations. Something that can be critical for clients with complex needs or those living in rural locations. 5. Quality Ratings and Customer Service: Some individuals prioritize higher star-rated plans with better customer service and fewer administrative headaches, even at a higher cost. 6. Projected Annual Costs: A higher-cost plan may end up being the most cost-effective overall for someone's specific meds and usage patterns.
You would only pick that if it makes sense to all the medications you take to cover your prescriptions. Best to speak to an agent to veify your medications to confirm the best overall cost for the year.
Hello Every plan is different in what medication it will cover and also sometimes a plan will cost less for the year even with paying a higher premium than a plan with a smaller premium. The copay and coinsurance may be lower on a higher premium plan so the overall cost will be less for the year.
Apparently that member has no idea how much more complex choosing a Part D has become over the past two years. There are two ways to redeem an Rx: A) Via the Part D(rug) plan chosen, B) Using either a US or Canadian online discount pharmacy. The “trick” is in the comparison in the copay cost among those options. Go to the Medicare.gov website; clicking on the “Drug & Health Plans”; put your zip code in place; begin to type in your list of Rx’s making sure that you are putting in your proper dosage (use the drop/down menus) and the frequency of the drug’s use. When all is completed, choose your top 4 local pharmacies, in addition to the Mail Order division. You will pay close attention to the number of stars each plan has been given by Medicare. Choose only those with a minimum of Three Stars! When you are shown the 3 best comparisons, please pick the least expensive one that includes BOTH the premium and the annual costs for the drug copays for each 90-day refill. That IS THE absolute best way to put your better choice in place. It will become effective on 1/1/26.
To get a larger formulary. Higher cost Medicare Part D plans could have a larger formulary, therefore more chance to have your prescription included. This would mean less costs for you. You can still switch during Open Enrollment each year.
Plans are insured or covered by a Medicare Advantage (HMO, PPO and PFFS) organization with a Medicare contract and/or a Medicare-approved Part D sponsor. Enrollment in the plan depends on the plan’s contract renewal with Medicare. We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare or 1-800-MEDICARE to get information on all of your options.
There could be multiple reasons. A plan with a higher overall cost maybe the plan that has a persons prescriptions included in the formulary. Another reason is anticipating needing a prescription that is not included in lower premium plans.
In the past, Medicare Part D was simply a math problem for me - finding the plan with the combined lowest cost for my client’s particular medications and preferred pharmacy. That changed in 2025 with the implementation of the $2000 out-of-pocket maximum under the Inflation Reduction Act of 2022. We now need to look much more closely at formulary medications to protect our clients in the event that they need a future unforeseen annd very-expensive medication. The quality of the program must now be taken into account in addition to the cost of the premium and the medications they currently use. We need to consider how likely the plan is to work with our clients for a formulary exception or how likely they are to require prior authorizations or step therapies. Insurance companies with fewer restrictions are worth paying a higher premium for because only approved / formulary medications count toward the $2000 maximum out-of-pocket amount and formularies have become much more restrictive.
Sometimes, a part D plan with a premium, can offer a lower total out of pocket cost (medicine cost plus premiums) for a specific list of medicines.
Every situation is different so it's important to run your specific medicines through the plan finder, and look at different pharmacies, to see which path and plan are the right one for you.
If you can receive deductible, copayment and coinsurance reductions by paying a greater premium it is possible that a plan with a higher cost makes sense. People who are high utilizers (many medications or few really expensive medications) may be potential candidates. You should have a broker analyze your unique situation and determine if this would be a sensible strategy for you!
It depends on their needs. They may use brand name or specialty drugs, they may get more local pharmacy choices and better mail order options or it may just be a matter of better service.
If they value just one of these reasons, it is sometimes enough of a reason for some of my clients. It gives them peace of mind and if they can afford it, even better.
Someone might choose a Part D plan with a high total cost if they are taking expensive medications and the plan offers lower copays or better coverage for those specific drugs, even though the monthly premium is higher. Essentially, they might prioritize potentially saving on drug costs overall, even if it means a higher upfront premium cost.
Here's a more detailed explanation:
Lower Copays/Better Coverage:
Some plans may have higher monthly premiums, but they offer significantly lower copays for certain medications, potentially saving the individual a lot of money in the long run.
High-Cost Medications:
If someone takes medications that are in the higher cost tiers (brand name vs. generic, specialty drugs), a plan with lower copays for those drugs can be a good value, even with a higher monthly premium.
Income-Based Premiums:
Some individuals may pay a higher premium based on their income, regardless of which plan they choose.
Value-Oriented Approach:
Some individuals may be willing to pay more for a plan if it offers better coverage or lower out-of-pocket costs for the specific medications they need, even if it means a higher monthly premium.
Avoiding Late Enrollment Penalties:
If someone is delaying enrollment in Part D, they may have to pay a late enrollment penalty in addition to their monthly premium, which could make it more cost-effective to enroll in a plan with a higher premium now.
A person might choose a Medicare Part D plan with a higher total cost (premium plus out-of-pocket costs) if it provides better coverage for their specific medications, especially if they take expensive prescriptions. This could mean lower costs for those medications within that plan's formulary, even with a higher overall premium, compared to a cheaper plan with less favorable drug coverage.
Someone might choose a higher total cost Medicare Part D plan because it better covers their specific medications, includes their preferred pharmacy, or results in lower overall out-of-pocket costs based on their prescriptions.
In years prior to 2025, someone would choose a high cost Part D plan in order to have low Rx co-pays, especially for brand Rx's. But now, with the donut hole gone, and the $2,000 cap on annual Rx costs, it makes much better sense to choose a lower cost Rx plan because once the $2,000 is met, you would not want to continue to pay a high premium for the Part D plan, for the balance of the year.
Depends on your medications. You have to look at the overall total benefit to yourself Low premiums don’t necessarily mean it’s the best plan. Premiums plus cost benefit
There are more than a couple of reasons. One, that particular company may just simply cost more than the other companies if they only offer one plan or two if they do offer more than one plan that particular plan that cost more could be a plan that would charge less for prescriptions, and the plan cost less would either cover less prescriptions or charge more for certain prescriptions. There’s no simple explanation for the reasoning for the cost of heart D there are numerous explanations.
People would pick a more expensive plan because they stand to save more on their prescriptions because their medications may be too expensive and in the higher tiers and not all PDP plans are equal. When you have little to know meds or they are in the lowest tier then a cheaper plan is in line.
If they factored in the premiums plus the copays for the total cost and the plan they have is higher than other plans I can only guess either they just did not want to change because they had been with their plan for so long or they do not understand the plans.
Honestly some people just stay in a plan because they’re used to it, regardless of the cost in other plans.
In my experience people most often choose a higher cost plan because it covers their mix of medications better than the lower cost plans. A lower cost plan may not cover their insulin, for example, and they’re set on staying with that particular drug.
As a broker I always look at the options and if a client is going to hit the out of pocket maximum regardless, it makes sense to go with the lower premium plan as long as their medications are covered and they aren’t paying for them out of pocket.
Your broker should look at the options with you and help you find the plan that most fits your needs.
All plans should be chosen based off each persons specific need the same goes for for prescription drugs coverage. Whether a high cost or not if the plan provides better coverage for your specific needs then you should go with the plan that meets your specific needs.
The plan you select must cover your current medications. If you are taking some expensive meds, the copay will be higher than a generic med. The lower the retail cost of your meds, usually the lower cost of your Part D plan.
Someone may choose a Part D with higher costs due to the drug formulary, pharmacy preferences, prior authorizations, step therapy and quantity limits restrictions for higher tier drugs.
Someone might choose a Medicare Part D plan with a high total cost if it covers medications they need that are not covered by other plans or if it offers lower copayments for expensive drugs. Additionally, the plan might offer extra benefits or a preferred pharmacy network that provides more value to the individual despite the higher cost.
When looking at Part D plans, I tell clients we don't want their cheapest plan but their least expensive plan. Sometimes those are the same plan but many times they aren't. Sometimes a more expensive plan (in terms of monthly premium) will actually cover someone's meds better so they pay less out of pocket than they would if they had a cheaper plan but had to pay more for their medications. In looking at out of pocket cost, the number to pay attention to is the TOTAL for the YEAR, not monthly, and then determine the least expensive using that information.
Not necessarily somebody on one prescription certainly wouldn't want to pay $100 a month even if you get on a more expensive drug it works out in the long run to have a more affordable plan for most some people know most people yes.
A senior would pick a plan with a high total cost if the prescription drugs they take are also high cost drugs. Often, they must incur a highly monthly Plan D cost. They should research available plans to ensure the lowest monthly cost. It should be remembered that each Medicare beneficiary has a cap on total out of pockets costs of $2000 per year. And Medicare beneficiaries can spread this cost out over a 12 month period each calendar year.
It’s a fact! Drug plans are not equal. What’s the difference?
1. Number of drugs covered.
2. Deductible or not before the plan starts to pay.
3. Copay or percentage of drug cost?
4. What drug stores take it.
5. Monthly premium.
Example: A new client told me his drug plan did not cover 2 of his drugs. That means there is no cap on what those drugs could cost annually. He was going to pay a little over $15,000 annually. We found a drug plan that cost him $100 more per month but his drug plan cost for the year went down to $475.
He had to pay more per month but saved over $14,000 in drug cost!
Sometimes it pay to pay more to save a bundle over the year!
A senior might pick a higher-cost Medicare Part D plan for better coverage of costly or specialty medications, lower copays or coinsurance, access to preferred pharmacies, or a wider drug formulary that includes all their needed prescriptions, ultimately saving on out-of-pocket costs for frequent or expensive drugs.
Thank you for your question. Someone might choose a higher cost Part D plan because it can actually save them money overall if it offers better coverage for their specific medications. A higher premium often means lower drug copays, fewer restrictions, or better coverage for expensive prescriptions.
That's why you need to check your Part D plan each year during the Annual Election Period and go with the one or one of the ones with the "lowest overall cost."
Sometimes paying a bit more overall actually makes life easier. Someone might pick a higher‑cost Part D plan because it covers all their specific drugs, has fewer headaches with prior authorizations, lets them use the pharmacy they like, or gives more predictable copays so there are fewer surprises during the year.
Lower drug costs ( Copays/CoinsuranceReasons for choosing a high-cost Part D plan: Lower Drug Costs (Copays/Coinsurance): A plan with higher premiums might have much lower copays or coinsurance for your specific, costly medications, leading to significant savings compared to a cheap plan where those drugs cost a fortune)
To cover most of the complex prescriptions because of their particular health situations. Medicare Advantage that comes with Part D may have higher copays for specific preferred meds
High total cost plans often have very low monthly premiums. Someone who rarely takes medications might save money overall with a low monthly payment, even if the plan has higher deductibles or cost-sharing. Someone expecting very high drug costs might choose a plan where out-of-pocket spending maxes out at a lower catastrophic threshold.
Each person's specific Medicare needs are different. It depends on what is more important to you! So some reasons a person may pick a higher cost plan could be
1. They do not want to be restricted by networks so want a plan that would allow them to fill prescriptions nationwide.
2. They love to travel around and outside of the country and want that flexibility
Talk with your trusted Medicare agent and they can do the research for you!
It sounds counterintuitive, but sometimes the most expensive plan on paper is actually the smartest choice. When people shop Part D, they naturally gravitate toward the lowest monthly premium. That's understandable but premium is only one piece of the puzzle. The number that actually matters is your total annual cost: premium plus deductible plus what you'll pay at the pharmacy for your specific medications. If your medication is covered at a lower cost on a higher premium plan, it could still save you money in the long run. That's why it's important to sit down with a professional to go over all options and true out-of-pocket expenses.
For Medicare Part D plans, it USED to be a higher plan premium could help save on overall copays throughout the year or a lower deductible. We would always look at TOTAL out of pocket costs when looking at a clients Part D. Now with the Inflation Reduction Act, this might be a moot point since ALL Part D plans are now capped at a $2,000 max out of pocket on drugs. I am not sure there is a need to pay a higher monthly premium unless it would help their drug costs or have a larger formulary. I would have to look at the person's medications and run comparisons.
Choosing a Medicare Part D plan with a high cost can be beneficial for several reasons:
1. Specific Medication Coverage: Plans with higher costs often offer better formularies, favorable for expensive brand-name or specialty drugs, which could be essential for enrollees with chronic conditions.
2. Lower Out-of-Pocket Costs: For frequent medication users, a plan with a higher premium but lower copays, coinsurance, and deductibles can save money over the year.
3. No or Low Deductible: Some higher-cost plans waive the Part D deductible.
4. Pharmacy Network Flexibility: Plans that charge more but offer broader pharmacy networks
The most common reason for paying a "high cost" Part D plan is because it's expansive formulary covers the expensive drugs that you take. When considering Part D, it's important to make sure your drugs are on the formulary, otherwise, you have to pay out of pocket for them without any price reductions. Choosing the right Stand alone Prescription Drug plan, or choosing a Medicare Advantage Plan + Drug Coverage (MAPD) is a crucial task. I'm here to help you make sure you know all of the costs and options when it comes to this big decision.
For Medicare Part D, someone would pick a plan with a high cost for a few different reasons. It could be that it covers their prescriptions better than a cheaper plan, or that particular plan participates at a specific pharmacy they want to go.
Beneficiaries need to verify that their drugs are on the formulary. Is their a drug deductible? What are the copays for their specific drugs? IF you medication is not on the $0 premium RX plan,that becomes a VERY expensive mistake. One that will cost them more than a high premium.
Some higher-cost Part D plans offer larger formularies and lower co-pays at the pharmacy, which can be beneficial for clients with specific medication needs or higher prescription drug costs.
