2020 Part D Changes

Medicare Part D Changes Annually

Each year, Medicare changes the benefits provided under Medicare Part D.  These changes could impact your annual costs for your Prescription Drug Coverage.  Specifically in 2020 here are some key changes for Medicare Part D.

1. Initial Deductible: will be increased by $20 from $415 in 2019 to $435 in 2020.  What does this mean for you? The initial deductible is the ‘first dollar’ spent on your prescriptions.  Certain plans will have a $435 deductible, which means that the individual will have to pay their first $435 in drug costs before the benefits start, but this usually only applies to higher tiered medications.  Other plans may offer a $0 deductible, which means that the benefits start immediately.
2. Initial Coverage Limit:  will increase $200 from $3,820 in 2019 to $4,020 in 2020.  What does this mean for you?  The initial coverage limit protects individuals from the dreaded “Donut Hole” (aka Coverage Gap), which results in higher out-of-pocket costs.  After the total retail drug cost exceeds the initial coverage limit, the individual will fall into the Donut hole.  By increasing the initial coverage limit by $200, this is a minor improvement which lowers the probability of reaching (or delays the timing to reach) the donut hole , which is a good thing.​
3. ​True Out-of-Pocket (TrOOP) Threshold: will increase from $5,100 in 2019 to $6,350 in 2020.​  What does this mean for you?  In most cases, this won’t have an impact.  Less than 5% of people actually reach this threshold.  Catastrophic coverage benefits start when someone exceeds the Out-of-Pocket threshold. In Catastrophic coverage, individuals will pay a much lower fee for their drugs – either 5% of the drug cost or a specific co-pay amount, whichever is greater.

• Generic Copay in Catastrophic Coverage– increasing from $3.40 in 2019 to $3.60 in 2020
• Brand Name Copay in Catastrophic Coverage – increasing from $8.50 in 2019 to $8.95 in 2020

 
By increasing the Out-Pocket threshold by $1,250, this could have a significant impact (several hundred dollars) on those individuals that previously reached the Catastrophic Coverage level.
 

All of these Medicare Part D changes in 2020 will have an impact on selecting the right Part D Prescription Plan for 2020.
 
 
Prescription Plan Part D Changes Annually
In addition to the Medicare Part D changes, the insurance companies change their Prescription drug plans each year.  These changes could impact the formulary (which drugs are covered), deductibles, premiums, etc.
 
It is imperative to select the right plan EACH YEAR to avoid the type of mistakes which could result in thousands of dollars of unnecessary costs!
 
There are about 25 Medicare Part D Prescription plan options in each state, and we strongly recommend using the tools on medicare.gov and/or contacting a trusted insurance broker to assist in this process.
 
 
A FREE Service offered to our clients…
We feel very strongly about ensuring our clients have the correct Part D Prescription Drug Card and thus, we provide the option for all of our clients to have their Prescription Drug coverage reviewed annually.  
 
Click Here to Find out more about our FREE RX Analysis program.