Fair Square Medicare Wordmark

Estimating Prescription Drug Costs

Cover image
By Daniel Petkevich
May 25, 2020

How our software figures out what you'll pay for prescriptions this year.

Predicting your medical expenses in a given year is difficult. You know you'll likely make one routine visit to the doctor and seek treatment for recurring conditions, but whether you'll go to urgent care to treat a spider bite or, end up in the emergency room because of a broken leg, is up to chance.

Stay Up to Date on Medicare!

Join the Fair Square Medicare Newsletter to stay informed on cost savings, changes to Medicare, and other valuable healthcare information.
But one of your healthcare expenses is relatively easy to estimate: what you'll pay for prescription drugs in a given year. To recommend what prescription drug plan is best for you, we estimate how much each one will cost you over the course of the year and then suggest the lowest cost one. In this post, I'll explain how we do it. But first, a primer on Prescription Drug Plans.

Prescription Drug Plan (PDP) Components

The elements of a PDP that determine its costs are:

Monthly Premium

What you pay every month to be insured.

Drug Tiers

Each PDP has a formulary, or list of drugs that it covers. Each drug is grouped into one of five tiers below.
  • Tier 1: Preferred Generic
  • Tier 2: Generic
  • Tier 3: Preferred Brand
  • Tier 4: Non-Preferred Drug
  • Tier 5: Specialty.
Your coverage decreases as tiers increase. For example, your plan might have a copay of $1 for tier one drugs, but only cover 25% of the cost for tier 5 drugs.

Deductible

Many PDP plans are marketed as having a single deductible, but if you read the fine print, you'll see that some plans cover tier 1 and tier 2 drugs before the deductible is met. Plans cannot have a deductible higher than $590 per calendar year in 2025.

Coverage Phases

  • Deductible: Between 0 and $590
  • Initial Coverage: You pay copays and coinsurance as outlined in the plan, up to $2,000.
  • Catastrophic Phase: You're done. The plan pays the rest of our drug costs.

Putting It All Together

We combine all of the above concepts to create a personalized month-by-month estimate of what you'll pay for your prescriptions drugs.
Each month we add up:
  • Your premium
  • What you'll spend on each prescription. We do this by cross-referencing your prescriptions with the plan's formulary. We estimate the retail price of the drug using data from GoodRx. Depending on your TrOOP, the amount of coverage your plan will provide for a given drug will vary.
  • We then suggest the plan with the lowest estimated total expenditure (premium and drug costs).

Stay Up to Date on Medicare!

Join the Fair Square Medicare Newsletter to stay informed on cost savings, changes to Medicare, and other valuable healthcare information.

Recommended Articles

Cover image
Does Medicare Cover Shock Wave Therapy for Plantar Fasciitis?
Nov 30, 2022
Cover image
How Much Does a Medicare Coach Cost?
Mar 20, 2023
Emergency section of a hospital exterior stock photo
How Does Medicare Pay for Emergency Room Visits?
Nov 21, 2022
Medicare Part A & Part B stock photo
How Much Does Medicare Part A Cost in 2025?
Nov 18, 2022
Cover image
Medicare Deductibles Resetting in 2025
Jan 18, 2024
Medicare check yes stock image
How to Apply for Medicare?
Jul 15, 2022
a variety of pills in a daily pill organizer stock image
Does Medicare Cover Vitamins?
Dec 5, 2022
Senior woman checking blood pressure/heart rate at home stock photo
Does Medicare Cover Home Heart Monitors?
Dec 1, 2022
Cover image
2024 Cost of Living Adjustment
Nov 13, 2023
Mouth guard used to help treat sleep apnea
Does Medicare Cover Mouth Guards for Sleep Apnea?
Dec 8, 2022
a chart explaining different enrollment periods on medicare
How Do I Sign up for Medicare? A Simple How-To Guide For You
Apr 8, 2022
Senior person holding tissue roll near a toilet bowl, using walker to walk to the bathroom stock photo
Is Emsella Covered by Medicare?
Nov 21, 2022
doctor consulting their patient stock image
Does Medicare Cover the Urolift Procedure?
Dec 6, 2022
woman in a hospital wearing a bandana being shown information by her doctor stock photo
Medicare Advantage Plans for Disabled People Under 65
Mar 24, 2023
Asian senior male patient having him eyes examined by laser machine
Finding the Best Vision Plans for Seniors
Jan 6, 2023
Physiotherapist showing workout record on exercise bike
Does Medicare Cover Exercise Physiology?
Jan 11, 2023
Upset senior woman crying stock photo
Does Medicare Cover Nuedexta?
Nov 30, 2022
Cover image
Does Medicare Cover RSV Vaccines?
Sep 13, 2023

More of our articles

13 Best Ways for Seniors to Stay Active in Indianapolis

13 Best Ways for Seniors to Stay Active in Philadelphia

13 Best Ways for Seniors to Stay Active in Phoenix

14 Best Ways for Seniors to Stay Active in Seattle

2024 Fair Square Client Retention and Satisfaction Report

2024 Fair Square NPS Report

Are Medicare Advantage Plans Bad?

Can I Change My Primary Care Provider with an Advantage Plan?

Can I Choose Marketplace Coverage Instead of Medicare?

Can I Have Two Primary Care Physicians?

Can I Laminate My Medicare Card?

Can I Use Medicare Part D at Any Pharmacy?

Can Medicare Advantage Plans be Used Out of State?

Costco Pharmacy Partners with Fair Square

Do All Hospitals Accept Medicare Advantage Plans?

Does Medicare Cover Air Purifiers?

Does Medicare Cover Bariatric Surgery?

Does Medicare Cover Cartiva Implants?

Does Medicare Cover Cataract Surgery?

Does Medicare Cover Cosmetic Surgery?

Does Medicare cover Deviated Septum Surgery?

Does Medicare Cover Diabetic Eye Exams?

Does Medicare Cover ESRD Treatments?

Does Medicare Cover Fosamax?

Does Medicare cover Hyoscyamine?

Does Medicare Cover Hypnotherapy?

Does Medicare Cover Ilumya?

Does Medicare Cover Inqovi?

Does Medicare Cover Kidney Stone Removal?

Does Medicare Cover Linx Surgery?

Does Medicare Cover Medical Marijuana?

Does Medicare Cover Mental Health?

Does Medicare Cover Nexavar?

Does Medicare Cover Oxybutynin?

Does Medicare Cover Ozempic?

Does Medicare Cover Physicals & Blood Work?

Does Medicare Cover Piqray?

Does Medicare Cover PTNS?

Does Medicare Cover Service Animals?

Does Medicare Cover Tymlos?

Does Medicare Cover Urodynamic Testing?

Does Medicare Cover Xiafaxan?

Does Medicare Have Limitations on Hospital Stays?

Does Medicare Pay for Antivenom?

Does Your Medicare Plan Cover B12 Shots?

Does Your Plan Include A Free Gym Membership?

Fair Square Bulletin: We're Revolutionizing Medicare

How Do Medicare Agents Get Paid?

How Medicare Costs Can Pile Up

How to Become a Medicare Agent

How to Choose a Medigap Plan

How to Deduct Medicare Expenses from Your Taxes

How to Enroll in Social Security

Is Balloon Sinuplasty Covered by Medicare?

Is Botox Covered by Medicare?

Is Gainswave Covered by Medicare?

Is the Shingles Vaccine Covered by Medicare?

Is Vitrectomy Surgery Covered by Medicare?

Medicare & Ozempic

Medicare 101

Medicare Advantage MSA Plans

Medicare Consulting Services

Medicare Savings Programs in Kansas

Medigap vs. Medicare Advantage

Plan G vs. Plan N

Saving Money with Alternative Pharmacies & Discount Programs

Seeing the Value in Fair Square

The Easiest Call You'll Ever Make

What Is a Medicare Supplement SELECT Plan?

What Is Medical Underwriting for Medigap?

Will Medicare Cover Dental Implants?

Will Medicare Cover it?

Your Medicare One-Stop-Shop

Your guide to Medicare Parts A & B, Medicare Advantage, and Medigap. 100% free.
Get the Fair Square Bulletin

Medicare savings tips, helpful guides, and more.

About

Medicare 101

Current Clients

Medicare Supplement Plans

Medicare Advantage Plans

Fair Square 2025

Terms of Use
Notice of Privacy Practices

Virgil Insurance Agency, LLC (DBA Fair Square Medicare) and www.fairsquaremedicare.com are privately owned and operated by Help Button Inc. Medicare supplement insurance plans are not connected with or endorsed by the U.S. government or the federal Medicare program. This is a solicitation of insurance. A licensed agent/producer may contact you. Medicare Supplement insurance is available to those age 65 and older enrolled in Medicare Parts A and B and, in some states, to those under age 65 eligible for Medicare due to disability or End-Stage Renal disease. Virgil Insurance Agency is a licensed and certified representative of Medicare Advantage HMO, HMO SNP, PPO, PPO SNP and PFFS organizations and stand-alone PDP prescription drug plans. Each of the organizations we represent has a Medicare contract. Enrollment in any plan depends on contract renewal. The plans we represent do not discriminate on the basis of race, color, national origin, age, disability, or sex. Plan availability varies by region and state. For a complete list of available plans please contact 1-800-MEDICARE (TTY users should call 1-877-486-2048), 24 hours a day/7 days a week or consult www.medicare.gov. © 2025 Help Button Inc

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.gov or 1-800-MEDICARE to get information on all of your options.

MULTIPLAN_FairSquareMedicare_01062022_M