Final answer:
In a group prescription drug plan, individuals typically pay an annual premium, a deductible, and cost-sharing expenses such as co-insurance or co-payments, with the federal government covering 75% of prescription drug costs up to a set limit.
Step-by-step explanation:
In a group prescription drug plan, such as the one provided by Medicare under the Medicare Prescription Drug and Modernization Act of 2003, the insured typically pays an annual premium and a deductible, and then they are responsible for cost-sharing expenses such as co-insurance or co-payments. For the program's costs, individuals pay these up-front costs, and then the federal government contributes by paying 75 percent of their prescription drug costs up to a certain threshold - $2,250 as per the given information. Beyond this point, various plans have different coverage rules, which can include the infamous 'donut hole' in Medicare coverage where individuals may have to pay out-of-pocket until they reach catastrophic coverage thresholds.
It is also worth noting that these types of prescription drug plans can be subject to political factors, with organizations like the American Association for Retired People (AARP) having a significant influence on the Medicare expansions that include prescription benefits. The rising costs of these benefits are a significant concern, as projections indicate substantial increases in federal spending on these programs.