2020 Medicare Part D Coverage Parameters: A summary of next year’s adjustments

by Grace Haerr, Content Marketing Specialist, IXSolutions

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 PartD 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 This coverage is provided up until the Medicare beneficiary has incurred $4,020 of prescriptiondrug expenses (based on the total cost of prescription drug expenses paid by the Medicare beneficiary andthe plan).
  • Medicare beneficiaries should expect to incur $896.25 of out-of-pocket expenses after the deductible anduntil 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 brandname 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 willbe 25% of the generic drug cost. So, if a generic drug had a retail price of $100, the Medicare beneficiarywill 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 have95% of the cost of the drug applied towards their out-of-pocket limit. So, if a brand name drug had a retailprice of $100, the Medicare beneficiary will pay $25 to fill their prescription, but $95 will be applied towardstheir 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 toreaching 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)

 

There’s a lot to consider when selecting your Medicare options. Take some time to review your options by visiting our website, or call us directly at 888-239-4408 ext. 2.

 

About IXSolutions:
IXSolutions services businesses, sole proprietors and retiring attorneys with their health and benefits needs. Contact Johnny DiVito to get started 224-301-2399 or visit www.ixshealth.com/cba.

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