Part D

WHAT DOES IT COST?

  • Stand-Alone Part D Prescription Drug Plan monthly premiums range from $14.50 – $100+. Your premium may be higher based on your income similar to the Medicare Part B premium. To see the Part D income-based premium chart click here.

  • Some Part D plans are included in the monthly premium of a Part C Medicare Advantage Prescription Drug (MAPD) plan.

  • Deductible – some plans charge the annual Medicare Part D deductible that you must meet before the insurance company shares in the cost of your Rx’s.

  • Cost-sharing = Co-payments and co-insurance that you must pay for your prescriptions.

 

HOW ARE PRESCRIPTIONS COVERED?

Prescription drugs are classified and listed in a formulary as:

  • Tier 1 = Preferred Generic Drugs

  • Tier 2 = Non-Preferred Generic

  • Tier 3 = Preferred Brand Drugs

  • Tier 4 = Non-Preferred Brand Drugs

  • Tier 5 = Specialty Tier Drugs

Plans may have different coverage/tiers for drugs.

 

Your co-payment or co-insurance is going to depend on the tier of your specific medications and the coverage phase that you are on.

 

PART D BENEFIT PHASES

  1. Deductible phase = $435 in 2020

  2. Initial coverage phase = (you + insurance company) cost-share adds the cost of your prescriptions to $4,020.

  3. Coverage Gap phase = (you) pay 25% for most brand name prescriptions and 25% for generics up to $6,350.

  4. Catastrophic phase = (you) pay the greater of $3.40 for generics, $8.50 for all other or 5% co-insurance, (company) the balance.

 

Once you enter the coverage gap, you may receive a 70% manufacturer discount on certain covered brand-name drugs. Although you’ll only pay 25% of the price for that brand-name drug, the entire price will count as your TROOP (True-Out-Of-Pocket) spending towards the $6,350 that you must reach in out of pocket expenses during the coverage gap phase.

 

 

EXAMPLE

 

Mrs. Anderson reaches the coverage gap in her Medicare drug plan. She goes to her pharmacy to fill a prescription for a covered brand-name drug. The price for the drug is $60, and there's a $2 dispensing fee that gets added to the cost, making the total price $62. Mrs. Anderson pays 25% of the total cost ($62 x .25 = $15.50). 

The amount Mrs. Anderson pays ($15.50) plus the manufacturer discount payment of $42 ($60 x .70 = $42) count as out-of-pocket spending. So, $57.50 counts as out-of-pocket spending and helps Mrs. Anderson get out of the coverage gap. The remaining $4.50, which is 5% of the drug cost ($3) and 75% of the dispensing fee ($1.50) paid by the drug plan, doesn't count toward Mrs. Anderson's out-of-pocket spending.

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