New proposed changes have been announced for Medicare Part D prescription drug coverage in 2019. Many beneficiaries are in the process of figuring out how this will impact them.
Prescription drug expenses can be a drain on Medicare recipients monthly income. Drugs that are essential to keeping you healthy, functioning and active can be prohibitively expensive.
Medicare Part D prescription coverage is designed to help alleviate some of the financial challenges beneficiaries face when paying for medication. Part D changes for 2019 address these issues.
2019 Changes for Medicare Part D Prescription Drug Plans
Proposed changes to Medicare Part D coverage will impact the Donut Hole, otherwise known as the coverage gap. The coverage gap is the amount between when Medicare recipients reach their threshold of coverage and when they begin to receive Catastrophic Coverage.
Initial Coverage Limit for 2019 Medicare Prescription Drug Plans
The proposed changes to the initial coverage limit, or ICL, in 2019 is said to increase to $3,820, up $70 from 2018. The donut hole entry point is set by the initial coverage limit. This means you’ll be able to spend a little more on your medications prior to reaching the donut hole in 2019.
Standard Initial Deductible for Medicare Part D in 2019
The proposed coverage changes include a slight increase in the initial deductible for prescriptions. The 2018 amount of $405 will go up to $415, a jump of $10. The initial deductible goes towards your out of pocket threshold (TrOOP), or when you leave the Donut Hole and move into Catastrophic Coverage.
The initial deductible is the amount you will pay before Medicare Part D begins to pay its share. The amount in 2019 is $415, but that doesn’t affect when you enter the Donut Hole portion of the Medicare Part D coverage (after expenses of $3,820). It does impact when you leave the Donut Hole and go to Catastrophic Care coverage.
Total Out of Pocket Threshold (TrOOP) for Medicare Part D in 2019
Catastrophic coverage begins after the Medicare Part D enrollee reaches the TrOOP threshold of $5,100 during one calendar year, up $100 from 2018. TrOOP is the amount a beneficiary must spend to exit the donut hole and enter into the Medicare Part D Catastrophic phase.
The Donut Hole Brand Name Drug Discount will Increase
Part D enrollees will receive a 75% Donut Hole discount on brand-name drugs while in the Donut Hole, closing the coverage gap. The discount is made up of a 70% discount paid by the brand-name drug manufacturer, plus a 5% discount paid by the Medicare Part D plan.
The 70% paid by the drug manufacturer, combined with your 25% payment, counts towards your TrOOP, or Donut Hole, maximum expenses. If you reach the Donut Hole and need to buy a medication that isn’t generic with a retail cost of $100, you’ll only pay $25.
Also, you’ll receive $95 credit toward meeting your 2019 total out-of-pocket spending limit. This money will make reaching the Catastrophic Coverage amount quicker. Thus, decreasing the amount Medicare Part D participants will have to pay annually for out of pocket for prescriptions.
The Donut Hole Generic Drug Discount will Increase
If you reach the Donut Hole, or coverage gap period, the generic drug discount will increase from 56% in 2018 to 63% in 2019. Your costs for generic drugs while in the donut hole will be 37% of the retail price of the drugs.
If your monthly drug expenses are more than $743, you’ll leave the 2019 Donut Hole and begin your Catastrophic Coverage. If you purchase medications with an average retail value of less than $318 per month, you won’t enter the Donut Hole during 2019.
Example of Part D Expenses that will Enter the Donut Hole
If a Medicare Part D enrollee has $800 per month in brand-name prescription medications to purchase, that will amount to $2,753.30 annually. This is based on $9,600 total annual purchases.
This total includes five months of initial prescription plan coverage, six months of Donut Hole coverage and one month of Catastrophic Coverage. The average monthly cost will be $229.42, or 28.7% of the total cost of annual prescriptions.
Medicare Part D Premiums Continue to Decline in 2019
For the second year in a row, the average basic premium for Medicare Part D prescription drug plans is projected to decrease in 2019. CMS reports the premiums are expected to decrease from $33.59 this year to $32.50 next year.
Compare Medicare Part D Plans for 2019
If you’re unsure about what your prescription drug expenses will be in 2019, and would like an estimate of how much you’ll spend based on your current medical needs, you can use this Part D plan finder.