Medicare Part D Costs: Prescription Drugs

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2016 Medicare Part D Costs: Prescription Drugs

Here are the highlights for the CMS defined Standard Benefit Plan changes from 2015 to 2016. The chart below shows the Standard Benefit design changes for plan years 2012, 2013, 2014, 2015 and 2016. This “Standard Benefit Plan” is the minimum allowable plan to be offered.

  • Initial Deductible:
    will be increased by $40 to $360 in 2016.
  • Initial Coverage Limit:
    will increase from $2,960 in 2015 to $3,310 in 2016.
  • Out-of-Pocket Threshold:
    will increase from $4,700 in 2015 to $4,850 in 2016.
  • Coverage Gap (donut hole):
    begins once you reach your Medicare Part D costs plan’s initial coverage limit ($3,310 in 2016) and ends when you spend a total of $4,850 in 2016.
    In 2016, Part D enrollees will receive a 55% discount on the total cost of their brand-name drugs purchased while in the donut hole. The 50% discount paid by the brand-name drug manufacturer will apply to getting out of the donut hole, however the additional 5% paid by your Medicare Part D plans will not count toward your TrOOP.
    For example: if you reach the donut hole and purchase a brand-name medication with a retail cost of $100, you will pay $45 for the medication, and receive $95 credit toward meeting your 2016 total out-of-pocket spending limit.
    Enrollees will pay a maximum of 58% co-pay on generic drugs purchased while in the coverage gap (a 42% discount). For example: If you reach the 2016 Donut Hole, and your generic medication has a retail cost of $100, you will pay $58. The $58 that you spend will count toward your TrOOP.
  • Minimum Cost-sharing in the Catastrophic Coverage Portion of the Benefit**:
    will increase to greater of 5% or $2.95 for generic or preferred drug that is a multi-source drug and the greater of 5% or $7.40 for all other drugs in 2016.
  • Maximum Co-payments below the Out-of-Pocket Threshold for certain Low Income Full Subsidy Eligible Enrollees:
    will increase to $2.95 for generic or preferred drug that is a multi-source drug and $7.40 for all other drugs in 2016.
 
 

Chart Comparing 2012 through 2016 Standard Benefit Model Plan Features

Medicare Part D Benefit Parameters for Defined Standard Benefit
2012 through 2016 Comparison
Part D Standard Benefit Design Parameters: 2016 2015 2014 2013 2010
Deductible – (after the Deductible is met, Beneficiary pays 25% of covered costs up to total prescription costs meeting the Initial Coverage Limit. $360 $320 $310 $325 $320
Initial Coverage Limit – Coverage Gap (Donut Hole) begins at this point. (The Beneficiary pays 100% of their prescription costs up to the Out-of-Pocket Threshold) $3,310 $2,960 $2,850 $2,970 $2,930
Out-of-Pocket Threshold – This is the Total Out-of-Pocket Costs including the Donut Hole. $4,850 $4,700 $4,550 $4,750 $4,700
Total Covered Part D Drug Out-of-Pocket Spending including the Coverage Gap – for Persons Qualifying For LIS – and are not eligible for the donut hole discount.
Catastrophic Coverage starts after this point.See note (1) below.
$7,062.50 (1) $6,680.00 (1) $6,455.00 (1) $6,733.75 (1) $6,657.50 (1)
Total Estimated Covered medicare Part D costs Drug Out-of-Pocket Spending including the Coverage Gap Discount (NON-LIS) See note (2). $7,515.22

plus a 55% brand discount

$7,061.76

plus a 55% brand discount

$6,690.77

plus a 52.50% brand discount

$6,954.52

plus a 52.50% brand discount

$6,730.39

plus a 50% brand discount

Average NON-LIS percentage brand and generic drug purchases made during the coverage gap used to estimate the Total Covered Part D OOP threshold for NON-LIS beneficiaries (see above). Brand: 84.6%
Generic: 15.4%
Brand: 85.9%
Generic: 14.1%
Brand: 86.2%
Generic: 13.2%
Brand: 85.6%
Generic: 14.4%
Brand: 86.3%
Generic: 13.7%
Catastrophic Coverage Benefit:
   Generic/Preferred
Multi-Source Drug
(3)
$2.95 (3) $2.65 (3) $2.55 (3) $2.65 (3) $2.60 (3)
    Other Drugs (3) $7.40 (3) $6.60 (3) $6.35 (3) $6.60 (3) $6.50 (3)
Part D Full Benefit Dual Eligible (FBDE) Parameters: 2016 2015 2014 2013 2012
   Deductible $0.00 $0.00 $0.00 $0.00 $0.00
   Copayments for
Institutionalized
Beneficiaries
$0.00 $0.00 $0.00 $0.00 $0.00
Maximum Copayments for Non-Institutionalized Beneficiaries
    Up to or at 100% FPL:
        Up to Out-of-Pocket Threshold
      Generic/Preferred
Multi-Source Drug
$1.20 $1.20 $1.20 $1.15 $1.10
      Other $3.60 $3.60 $3.60 $3.50 $3.30
     Above Out-of-Pocket
Threshold
$0.00 $0.00 $0.00 $0.00 $0.00
    Over 100% FPL:
        Up to Out-of-Pocket Threshold
      Generic/Preferred
Multi-Source Drug
$2.95 $2.65 $2.55 $2.65 $2.60
      Other $7.40 $6.60 $6.35 $6.60 $6.50
     Above Out-of-Pocket
Threshold
$0.00 $0.00 $0.00 $0.00 $0.00
Part D Full Subsidy – Non Full Benefit Dual Eligible Full Subsidy Parameters: 2016 2015 2014 2013 2012
Eligible for QMB/SLMB/QI, SSI or applied and income at or below 135% FPL and resources < $8,780 (individuals) or < $13,930 (couples) (4)
   Deductible $0.00 $0.00 $0.00 $0.00 $0.00
    Maximum Copayments up to Out-of-Pocket Threshold
      Generic/Preferred
Multi-Source Drug
$2.95 $2.65 $2.55 $2.65 $2.60
      Other $7.40 $6.60 $6.35 $6.60 $6.50
   Maximum Copay above
Out-of-Pocket
Threshold
$0.00 $0.00 $0.00 $0.00 $0.00
Partial Subsidy Parameters: 2016 2015 2014 2013 2012
Applied and income below 150% FPL and resources between $8,780-$13,640 (individuals) or $13,930-$27,250 (couples) (category code 4) (4)
   Deductible $74.00 $66.00 $63.00 $66.00 $65.00
   Coinsurance up to
Out-of-Pocket
Threshold
15% 15% 15% 15% 15%
    Maximum Copayments above Out-of-Pocket Threshold
      Generic/Preferred
Multi-Source Drug
$2.95 $2.65 $2.55 $2.65 $2.60
      Other $7.40 $6.60 $6.35 $6.60 $6.50
Retiree Drug Subsidy Amounts: 2016 2015 2014 2013 2012
      Cost Threshold $360 $320 $310 $325 $320
      Cost Limit $7,400 $6,600 $6,350 $6,600 $6,500
(1) Total Covered medicare Part D costs Spending at Out-of-Pocket Threshold for Non-Applicable Beneficiaries – Beneficiaries who ARE entitled to an income-related subsidy under section 1860D-14(a) (LIS)
(2) Total Covered medicare Part D costs Spending at Out-of-Pocket Threshold for Applicable Beneficiaries – Beneficiaries who are NOT entitled to an income-related subsidy under section 1860D-14(a) (NON-LIS) and do receive the coverage gap discount. For 2016, the weighted gap coinsurance factor is 89.234%. This is based on the 2014 PDEs (84.6% Brands & 15.4% Generics)
(3) The Catastrophic Coverage is the greater of 5% or the values shown in the chart above. In 2016, beneficiaries will be charged $2.95 for those generic or preferred multisource drugs with a retail price under $59 and 5% for those with a retail price greater than $59. As to Brand drugs, beneficiaries would pay $7.40 for those drugs with a retail price under $148 and 5% for those with a retail price over $148.
(4) The actual amount of resources allowable may be updated for contract year 2016.