It’s time to shop Medicare Part D plans! Research shows that most of you are saying “why bother?” but you should know that those folks that change plans often lower their out-of-pocket drug costs. Each state has anywhere from 19-26 Prescription Drug Plans (PDPs) you can choose from. We suggest you compare plans based on the drugs you take to avoid being hit with surprise out-of-pocket costs in 2018.
Here’s a heads up on the changes to look out for the 2018 plans:
NUMBER OF PRESCRIPTION DRUG PLANS AVAILABLE
In 2018, 782 Prescription Drug Plans are available nationwide, up from 2017’s 746 plans. There are 216 Low-income Subsidy (LIS or “benchmark”) plans available for enrollment of LIS beneficiaries for no premium vs. 231 in 2017. More plan choices this year generally breaks the trend of past years. Since Part D’s inception in 2006, PDPs available has decreased significantly: there were 1,866 stand-alone plans in 2007.
PREMIUMS
Premiums are down! Well, slightly. The 2018 Part D base beneficiary premium is $35.02, which is down from $35.63 in 2017. PDP monthly premiums for 2018 vary across plans and regions, ranging from a low of $12.60 for a PDP available in 12 out of 34 regions to a high of $197 for a PDP in Texas. Part D enrollees with higher incomes will pay an income-related monthly premium, in addition to the monthly premium for their specific plan. Additional premium and cost-sharing assistance is available for Part D enrollees with low incomes and modest assets.
BENEFITS
Initial Coverage
In 2018, the Part D standard benefit has a $405 deductible and pay 75% up to the coverage limit ($3,750) in total drug costs, up $50 from $3700 in 2017.
Coverage Gap (“Donut Hole”)
Unfortunately, if your total drug costs are above $3,750 and below eligibility for catastrophic coverage (see below), you’re in the coverage gap. The infamous “donut hole.”
Since the Affordable Care Act (“Obamacare”), out-of-pocket costs in the coverage gap have decreased substantially by instating a 50% manufacturer discount on brand-name drugs. In 2018, you are required to pay 35% of the total cost of brands and 44% of the total cost of generics. According to Kaiser Family Foundation, Medicare is phasing in additional subsidies for brands and generic drugs that will reduce donut hole beneficiary responsibility to 25% by 2020.
Catastrophic Coverage
You are covered by catastrophic coverage if you have true out-of-pocket drug costs of $5,000 and Medicare spending plus drug company rebates reach $3,418, which is a total of that’s $8,418 for non-LIS enrollees. The low-income threshold (for LIS enrollees) is an estimated $7,509. To simplify, non-LIS enrollees have to spend $5,000 bucks, out-of-pocket, before reaching catastrophic coverage. When you reach catastrophic coverage, Medicare pays for 80% of your drug costs, the PDP pays for 15%, and you are responsible for just 5%.
Standard benefit amounts have increased each year (except 2014) since 2006.
Reminder: Part D open enrollment for 2018 has begun and will continue through December 7th. Visit MedicareDrugPlans.com to see ratings and reviews of plans in your area. You can also look up key plan information such as premiums, deductibles, coverage gaps, and whether the plan premium is waived based on income. Also, feel free to rate your current plan.
