Here are a few highlights of the defined standard Medicare Part D plan changes from 2019 to 2020. The CMS “Part D Benefit Parameters for Defined Standard Benefit” is the minimum allowable Medicare Part D plan coverage. However, CMS does allow Medicare Part D plans to offer a variation on the defined standard benefits (for example, a Medicare Part D plan can offer a $0 Initial Deductible).
- Initial Deductible:
will be increased by $20 to $435 in 2020.
- Initial Coverage Limit (ICL):
will increase from $3,820 in 2019 to $4,020 in 2020.
- Out-of-Pocket Threshold (or TrOOP):
will increase from $5,100 in 2019 to $6,350 in 2020.
- Coverage Gap (Donut Hole):
begins once you reach your Medicare Part D plan’s initial coverage limit ($4,020 in 2020) and ends when you spend a total of $6,350 out-of-pocket in 2020.
- 2020 Donut Hole Discount:
Part D enrollees will receive a 75% Donut Hole discount on the total cost of their brand-name drugs purchased while in the Donut Hole. The discount includes, a 70% discount paid by the brand-name drug manufacturer and a 5% discount paid by your Medicare Part D plan. The 70% paid by the drug manufacturer combined with the 25% you pay, count toward your TrOOP or Donut Hole exit point.
For example: If you reach the Donut Hole and purchase a brand-name medication with a retail cost of $100, you will pay $25 for the medication, and receive $95 credit toward meeting your 2020 total out-of-pocket spending limit.
Medicare Part D beneficiaries who reach the Donut Hole will also pay a maximum of 25% co-pay on generic drugs purchased while in the Coverage Gap (receiving a 75% discount).
For example: If you reach the 2020 Donut Hole, and your generic medication has a retail cost of $100, you will pay $25. The $25 that you spend will count toward your TrOOP or Donut Hole exit point.
- Minimum Cost-sharing in the Catastrophic Coverage Portion of the Benefit:
beneficiaries will be charged $3.60 for those generic or preferred multi source drugs with a retail price under $72 and 5% for those with a retail price greater than $72. For brand-name drugs, beneficiaries would pay $8.95 for those drugs with a retail price under $179 and 5% for those with a retail price over $179.
- Maximum Co-payments below the Out-of-Pocket Threshold for certain Low-Income Full Subsidy Eligible Enrollees:
will increase to $3.60 for generic or preferred drug that is a multi-source drug and $8.95 for all other drugs in 2020.
Need help calculating your 2020 drug costs? For more information and guidance on prescription drug coverage and costs, please call us at (858) 391-8544.