Medicare Prescription Drug Plan (Part D) is used either as a stand-alone (Original Medicare with or without Medicare Supplement also known as Medigap), or as a part of Medicare Advantage with Prescription Drugs (MAPD). There are multiple Medicare Prescription Drug Plan changes in the Standard Benefit Plan for 2019. The Standard Benefit Plan is the prescription drug plan offering minimum allowable benefits.
Highlights of Medicare Prescription Drug Plan Changes 2019
There are four stages in the Medicare Prescription Drug Plan, also known as PDP. The PDP stages parameters will be changed in 2019. The updated numbers are provided below. For your convenience, the 2018 numbers are also provided.
1. Yearly Deductible
You pay the first $415 of drug costs before the plan starts to pay ($405 in 2018).
2. Initial Coverage
For each covered drug you pay a copayment/coinsurance defined by the plan, and the plan pays its share. The typical coinsurance is 25%, which means you pay 25% of the drug costs; the insurance company pays the rest. The initial coverage continues until the total drug costs (total of what you’ve paid and what the insurance company paid) reach $3,820 ($3,750 in 2018). You pay 25% of costs between $415 and $3,820 (between $405 and $3,750 in 2018).
3. Coverage Gap
Once the total costs of prescriptions paid by you and your plan have reached $3,820 ($3,750 in 2018), you will pay ALL drug costs until you’ve spent $5,100 true out-of-pocket costs (TrOOP) ($5,000 in 2018). This does not include monthly premiums (you must continue to pay them), but does include yearly deductible and coinsurance/copayments.
In 2019, during the Gap period you’ll pay for 25.0% of brand name drug undiscounted costs (35.0% in 2018) and 37% of generic drug costs (44% in 2018). Nevertheless, you can count the full price of the prescription towards the amount you are required to spend in order to qualify for catastrophic coverage.
The coverage gap for generic drugs will decrease each year until the member’s cost-sharing amount reaches 25% in 2020.
4. Catastrophic Coverage
Once you’ve spent $5,100 out-of-pocket during the year for PDP ($5,000 in 2018), the coverage gap ends and catastrophic coverage begins. You will pay the greater of either a small 5% coinsurance (5% in 2018) or a small copayment of $3.40 for generic drugs ($3.35 in 2018) and $8.50 for brand name drugs ($8.35 in 2018) for each drug until the end of the calendar year.
Note. The dollar amounts above represent the MAXIMUM of allowed. Some plans may have numbers below the maximum.
Medicare Part D Enrollment
- 2019 Annual Enrollment Period (AEP) will start on October 15, 2018 and end on December 7, 2018. Don’t miss it!
- Your new coverage will begin on Jan. 1 of the next year.
- You may make more than one election during the AEP. Your final election will overwrite all previously made elections.
- You cannot change your PDP coverage after AEP, unless you are entitled to one of the Special Enrollment Periods (SEPs).
To find more about Part D Enrollment, see Medicare Enrollment Periods for Medicare Prescription Drug Plan (PDP).
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