How Is Medicare Part D Calculated?

Medicare helps senior citizens by providing health insurance coverage for medical treatments, hospital costs, preventive care and prescription drugs, depending on the plans you choose. Medicare Part D provides prescription drug plans that you can add to the initial coverage you get from Medicare Parts A and B.

Medicare Part D Identification

• Medicare Part D covers prescription drugs. You can pick different Part D plans approved by Medicare that work in your area and that give you the benefits that best match your needs. To receive Medicare Part D coverage, you must pay monthly premiums that can vary according to a number of factors, including include the plan you choose. You must enroll in either Medicare Part A or B to enroll in a Part D plan. You are not required to have Medicare Part C, but you can add Part D to your Part C coverage if necessary.

Medicare Part D Premiums

• The standard premiums you must pay for Medicare Part D coverage vary according to the plan you choose. Plans with more coverage and greater benefits, with lower deductibles, are more expensive. However, your premiums also vary according to your income. Individuals with higher incomes pay higher premiums for their Part D (and Part B) coverage. How much more depends on your tax return filing status and your annual income. As of 2011, according to the handbook "Medicare and You," if you are married filing jointly, you have to pay higher premiums if your income is more than $170,000 per year. If you have any other filing status, you pay higher premiums if your annual income is higher than $85,000.

Premiums for Married Jointly Filing

• If you file a joint tax return, you have to pay different premiums as your income grows. As of 2011, if your annual income is between $170,001 and $214,000, you pay the normal premium for your plan plus $12. If your income ranges from $214,001 to $320,000, you pay an additional $31.10 every month. If your income is $320,001 to $428,000, you pay your premiums plus $50.10 per month. If your income $428,001 or higher, you pay an additional $69.10.

Premiums for Individual Filing

• If you file your tax return as an individual (single person, married filing separately or head of household), your premiums also change as your income rises. If your annual income is between $85,000 and $107,000, you pay your monthly premium plus $12. If your income is between $107,001 and $160,000, you pay an additional $31.10 per month. If your income is between $160,001 and $214,000, you add $50.10 to your plan's monthly premium. If your income is higher than $214,000, you add $69.10.