Medicare Part D Changes Annually

Each year, Medicare changes the benefits provided under Medicare Part D.  These changes will most likely impact your annual costs for your Prescription Drug Coverage.  Specifically in 2018, here are some key changes for Medicare Part D.

• Initial Deductible: will be increased by $5 from $400 in 2017 to $405 in 2018.

What does this mean for you? The initial deductible is the ‘first dollar’ spent on your prescriptions.  Certain plans will have a $405 deductible, which means that the individual will have to pay their first $405 in drug costs before the benefits start.  Other plans may offer a $0 deductible, which means that the benefits start immediately.

• Initial Coverage Limit:  will increase $50 from $3,700 in 2017 to $3,750 in 2018.

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 $50, 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.
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• What you Pay in the Donut Hole: for Brand Name drugs, this will reduce from 40% in 2017 to 35% in 2018.  For Generic drugs, this will decrease from 51% in 2017 to 44% in 2018.

 
What does this mean for you?  The cost sharing % an individual has to pay continues to drop each year until we plateau in 2020 at 25% cost sharing for both Brand name and Generic Drugs.  In theory, this is a great thing since the % of cost sharing to the individual continues to drop each year.  In practicality, the retail cost of Prescription Drugs continues to rise at a significant rate which tends to offset the savings anticipated with the annual improvements to the Donut Hole.
 

​See this link for more details on changes in future years to the Donut Hole.

https://www.medicare.gov/part-d/costs/coverage-gap/more-drug-savings-in-2020.html
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• ​True Out-of-Pocket (TrOOP) Threshold: will increase from $4,950 in 2017 to $5,000 in 2018.​  

What does this mean for you?  In most cases, this won’t have an impact.  Less than 10% 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 $3.30 in 2017 to $3.35 in 2018
• Brand Name Copay in Catastrophic Coverage – increasing from $8.25 in 2017 to $8.35 in 2018

 
By increasing the Out-Pocket threshold by $50, this will have a minor impact on the length of time an individual will remain in the donut hole before exiting into the Catastrophic coverage.
 
All of these Medicare Part D changes in 2018 will have an impact on selecting the right Prescription Drug Card.
 
 
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 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.

Back in March of 2015, the government passed a bill called, H.R.2 - Medicare Access and CHIP Reauthorization Act of 2015 which is intended to help sustain the long-term viability of the Medicare Program.  There were numerous changes in this bill which impacted how physicians get paid on Medicare.  The number of changes that impacted Medicare beneficiaries directly was minimal.

One of the changes in this bill (Section 401 of the MACRA of 2015) which does impact Medicare Beneficiaries (Changes to Medigap Plan F in 2020) has already been heavily documented and reviewed.

Another change (Section 402 of the MACRA of 2015) will impact those individuals whose annual income is between $133,501 and $214,000 (as an individual) or $267,001 and $428,000 (married, filing jointly).

Income Related Monthly Adjustments (IRMAs) are required for individuals to pay to the government for their Part B & D premiums if they make more than $85,000 (as an individual) or $170,000 (as a couple).  

Section 402 of the MACRA of 2015 changed the income thresholds that are used to determine which Tier of IRMA amounts an individual has to pay, effective January 1, 2018.

YOU ARE IMPACTED BY THESE IRMA CHANGES, If you're income is:

• between $133,501 and $214,000 (as a single) ...OR 
• between $267,001 and $428,000 (married filing jointly)

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YOU ARE NOT IMPACTED BY THESE IRMA CHANGES If you're income is:

• below $133,500 (as a single) or $214,000 (married filing jointly )... OR
• above $214,000 (as a single) or $428,000 (married filing jointly)

If you have any further questions about how these ​changes to the IRMA tables in 2018, you can give us a call at 908-272-1970 to learn more.