NEW YORK (MONEY Magazine) - Q. How much will I have to pay?

Although the government is picking up the lion's share of the tab, you'll still end up shelling out a fair amount for drug coverage.

Medicare projects that the average premium will run around $32 a month. But in most areas there will be bare-bones plans available for less than $20 (and, in many cases, less than $5), as well as Cadillac versions with lower deductibles and additional coverage that may cost as much as $100.

In addition, under the standard plan, you'll pay a $250 deductible and work your way through a complicated copayment structure (see "What You'll Pay" on page 162).

You pay 25 percent of the first $2,250 in drug bills you incur. At that point, you'll hit a coverage gap commonly referred to as the doughnut hole, in which you're responsible for all of your drug costs until you've spent a total of $3,600. (If you have no other coverage, you'll reach that level when your total bill hits $5,100).

Above that threshold, benefits kick in again, with Medicare paying 95 percent of your drug costs for the rest of the year.

"The benefit may not be as generous as some would want," says Tricia Neuman, director of the Kaiser Family Foundation's Medicare Policy Project. "But what's most important is having insurance coverage that will help you pay for medicine if you become ill and run up huge drug bills."

You don't need a catastrophic illness to save money, although some people will end up saving much more than others.

The biggest beneficiaries will be low income seniors, who are expected to see their costs drop by 83 percent vs. an average 28 percent dip for all other participants. People who spend more than $3,600 out of pocket could see a 37 percent decline.

Not everyone will be a winner: One in four participants are projected to see costs rise, on average, by nearly $500 a year, including people with low drug costs who currently pay no deductible on their insurance and people who may lose access to more generous employer-sponsored retiree coverage as a result.

How do I know if the benefit is right for me? >>

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