Medicare Part D Premium Will Increase in 2022

The Centers for Medicare and Medicaid Services (CMS) recently announced that the projected 2022 Medicare Part D monthly premium will average at $33. This is an increase from $31.47 in 2021. If you have questions about how much Medicare costs, our advisors are here to offer local help with Medicare concerns. Read more about Medicare Part D and how this premium increase could impact you.

CMS Announces 2022 Medicare Part D Rate and Defined Benefit Coverage Parameters

Here are a few highlights of the defined standard Medicare Part D plan changes from 2021 to 2022. 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 $35 to $480 in 2022.
• Initial Coverage Limit (ICL): 
  will increase from $4,130 in 2021 to $4,430 in 2022.
• Out-of-Pocket Threshold (or TrOOP): 
  will increase from $6,550 in 2021 to $7,050 in 2022.
• Coverage Gap (Donut Hole): 
  begins once you reach your Medicare Part D plan’s initial coverage limit ($4,430 in 2022) and ends when you spend a total of $7,050 out-of-pocket in 2022.
• 2022 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 2022 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 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 $3.95 for those generic or preferred multisource drugs with a retail price under $79 and 5% for those with a retail price greater than $79. For brand-name drugs, beneficiaries would pay $9.85 for those drugs with a retail price under $197 and 5% for those with a retail price over $197.
• Maximum Co-payments below the Out-of-Pocket Threshold for certain Low-Income Full Subsidy Eligible Enrollees: 
  will increase to $3.95 for generic or preferred drug that is a multi-source drug and $9.85 for all other drugs in 2022.

Need help calculating your 2022 drug costs? For more information and guidance on prescription drug coverage and costs, please call us at (858) 391-8544.

CMS Newsroom: Accessed January 15, 2021: https://www.cms.gov/newsroom/news-alert/cms-releases-2022-projected-medicare-part-d-average-premium

https://www.cms.gov/files/document/2022-announcement.pdf