Benefits Buzz
2020 Part D Coverage Parameters
Posted on April 23rd, 2019
Each year, the Centers for Medicare and Medicaid Services (CMS) adjusts the cost sharing limits for the standard Medicare Part D plan. Earlier this month, CMS announced the adjustments for 2020. Below is a summary of the adjustments for next year:
Deductible: $435 (a $20 increase from 2019)
- This is the amount a Medicare beneficiary must pay for prescription drugs before coverage under the Part D plan begins.
Initial Coverage Limit: $4,020 (a $200 increase from 2019)
- After the deductible, the Part D plan will provide coverage for prescriptions subject to copays or coinsurance. This coverage is provided up until the Medicare beneficiary has incurred $4,020 of prescription drug expenses (based on the total cost of prescription drug expenses paid by the Medicare beneficiary and the plan).
- Medicare beneficiaries should expect to incur $896.25 of out-of-pocket expenses after the deductible and until the initial coverage limit is reached.
- Once the initial coverage limit is met, you are said to have reached the “donut hole” entry point.
Donut Hole (Coverage Gap): Begins after $4,020 of prescription drug expenses have been incurred.
- In the past, it was as if there was another deductible that had to be met. However, the Affordable Care Act (ACA) closed this so-called donut hole. In 2020, there will be a 75% discount provided for generic and brand name medications purchased during the donut hole, up until the out-of-pocket limit.
- For generic drugs, only the cost the Medicare beneficiary pays applies to the out-of-pocket limit. This will be 25% of the generic drug cost. So, if a generic drug had a retail price of $100, the Medicare beneficiary will pay $25 to fill their prescription, and $25 will be applied towards their out-of-pocket limit.
- For brand name drugs, the Medicare beneficiary will only pay 25% of the drug expense, but they will have 95% of the cost of the drug applied towards their out-of-pocket limit. So, if a brand name drug had a retail price of $100, the Medicare beneficiary will pay $25 to fill their prescription, but $95 will be applied towards their out-of-pocket limit.
Out-of-Pocket Limit: $6,350 (an increase of $1,250 from 2019)
- This is the maximum amount of out-of-pocket expenses a Medicare beneficiary will have to pay prior to reaching their catastrophic coverage benefit.
Catastrophic Coverage: Small copays are required after the out-of-pocket limit has been met.
- $3.60 for generic drugs (a $.20 increase from 2019)
- $8.95 for brand name drugs (a $.45 increase from 2019)
Contact a Flex Individual Sales Consultant with any questions on Medicare Part D plans and the options we can help provide at 888-353-9178.
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