Estimating Prescription Drug Costs
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.
Speak with a Medicare Advocate
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).
Try it out at www.fairsquaremedicare.com
Recommended Articles
Medigap vs. Medicare Advantage
May 25, 2020
Does Medicare Cover Kyphoplasty?
Dec 9, 2022
Does Medicare Cover Abortion Services?
Dec 13, 2022
Fair Square Bulletin: We're Revolutionizing Medicare
Apr 27, 2023
Can I Laminate My Medicare Card?
Dec 22, 2022
Fair Square Client Newsletter: AEP Edition
Oct 2, 2023
Can Doctors Choose Not to Accept Medicare?
Dec 8, 2022
Is HIFU Covered by Medicare?
Nov 21, 2022
Are Medicare Advantage Plans Bad?
May 5, 2022
13 Best Ways for Seniors to Stay Active in Philadelphia
Mar 7, 2023
Do You Need Books on Medicare?
Apr 6, 2023
Does Medicare Cover Mental Health?
Oct 12, 2022
What is the Medicare ICEP?
Apr 7, 2023
Does Medicare Cover Jakafi?
Dec 12, 2022
Does Medicare Cover Stair Lifts?
Nov 18, 2022
Does Medicare Have Limitations on Hospital Stays?
Mar 15, 2024
Does Medicare Cover Light Therapy for Psoriasis?
Jan 17, 2023
How is Medicare Changing in 2025?
Dec 21, 2022
More of our articles
14 Best Ways for Seniors to Stay Active in Washington, D.C.
20 Questions to Ask Your Medicare Agent
2024 Fair Square Client Retention and Satisfaction Report
2024 Fair Square NPS Report
Can I switch From Medicare Advantage to Medigap?
Can I Use Medicare Part D at Any Pharmacy?
Costco Pharmacy Partners with Fair Square
Denied Coverage? What to Do When Your Carrier Says No
Do I Need Medicare If My Spouse Has Insurance?
Do I Need to Renew My Medicare?
Do Medicare Supplement Plans Cover Dental and Vision?
Do You Need Medigap if You're Eligible for Both Medicare and Medicaid?
Does Medicare Cover Air Purifiers?
Does Medicare Cover an FMT?
Does Medicare Cover Breast Implant Removal?
Does Medicare Cover Cataract Surgery?
Does Medicare Cover Cosmetic Surgery?
Does Medicare Cover COVID Tests?
Does Medicare Cover Driving Evaluations?
Does Medicare Cover Flu Shots?
Does Medicare Cover Hepatitis C Treatment?
Does Medicare Cover Incontinence Supplies?
Does Medicare Cover Ketamine Infusion for Depression?
Does Medicare Cover Krystexxa?
Does Medicare Cover Linx Surgery?
Does Medicare Cover Ofev?
Does Medicare Cover RSV Vaccines?
Does Medicare Cover Service Animals?
Does Medicare Cover SIBO Testing?
Does Medicare Cover TENS Units?
Does Medicare Cover Urodynamic Testing?
Does Medicare Cover Wart Removal?
Does Medicare Cover Xiafaxan?
Does Medicare Cover Zilretta?
Does Medicare Pay for Bunion Surgery?
Does Medicare Pay for Varicose Vein Treatment?
Does Medicare Require a Referral for Audiology Exams?
Does Retiring at Age 62 Make Me Eligible for Medicare?
Explaining IRMAA on Medicare
Finding the Best Vision Plans for Seniors
Health Savings Accounts (HSAs) and Medicare
How Medicare Costs Can Pile Up
How Much Does a Pacemaker Cost with Medicare?
How Much Does Medicare Cost?
How Much Does Medicare Part A Cost in 2025?
How Much Does Open Heart Surgery Cost with Medicare?
How Much Does Rexulti Cost with Medicare?
How Much Does Xeljanz Cost with Medicare?
How Often Can I Change Medicare Plans?
How to Apply for Medicare?
How to Become a Medicare Agent
How to Choose a Medigap Plan
How to Compare Medigap Plans in 2025
How to Enroll in Social Security
Is Balloon Sinuplasty Covered by Medicare?
Is Gainswave Covered by Medicare?
Is the Shingles Vaccine Covered by Medicare?
Medicare 101
Medicare Deductibles Resetting in 2025
Medicare Guaranteed Issue Rights by State
Medicare Savings Programs in Kansas
Moving? Here’s What Happens to Your Medicare Coverage
Should You Work With A Remote Medicare Agent?
The Fair Square Bulletin: October 2023
Top 10 Physical Therapy Clinics in San Diego
Turning 65 and Thinking of Keeping COBRA? Here’s Why It Usually Backfires
Welcome to Fair Square's First Newsletter
What Happens to Unused Medicare Set-Aside Funds?
What is a Medicare Beneficiary Ombudsman?
What Is a Medicare Supplement SELECT Plan?
What is Plan J?
What's the Difference Between HMO and PPO Plans?
Get the Fair Square Bulletin
Medicare savings tips, helpful guides, and more.
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. © 2026 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
Fair Square Medicare
