There is no single monthly premium for Part D prescription drug coverage, and differences among plan benefits can create wide variation in total costs. Under the standard benefit model established by federal law, you will pay:
- A monthly premium.
- An annual deductible before coverage begins.
- A part of the cost of each prescription such as a flat co-payment or percentage, up to a pre-defined limit, during the initial coverage period.
- A percentage of the costs in the Coverage Gap.
- A nominal amount under Catastrophic Coverage.
In 2018:
Initial Deductible:
will be increased by $5 to $405.
Initial Coverage Limit (ICL):
will increase from $3,700 in 2017 to $3,750 in 2018.
Out-of-Pocket Threshold (or TrOOP):
will increase from $4,950 in 2017 to $5,000 in 2018.
Coverage Gap (donut hole):
begins once you reach your Medicare Part D plan’s initial coverage limit ($3,750 in 2018) and ends when you spend a total of $5,000 out of pocket in 2018.
Part D enrollees will receive a 65% Donut Hole discount on the total cost of their brand-name drugs purchased while in the donut hole. The discount includes, 50% discount paid by the brand-name drug manufacturer and will apply to getting you out of the donut hole (or TrOOP), however the additional 15% paid by your Medicare Part D plan will not count toward your TrOOP.
For example: If you reach the donut hole and purchase a brand-name medication with a retail cost of $100, you will pay $35 for the medication, and receive $85 credit toward meeting your 2018 total out-of-pocket spending limit.
Medicare Part D beneficiaries who reach the Donut Hole will also pay a maximum of 44% co-pay on generic drugs purchased while in the coverage gap (a 56% discount).
For example: If you reach the 2018 Donut Hole, and your generic medication has a retail cost of $100, you will pay $44. The $44 that you spend will count toward your TrOOP or Donut Hole exit point.
Minimum Cost-sharing in the Catastrophic Coverage Portion of the Benefit**:
will increase to greater of 5% or $3.35 for generic or preferred drug that is a multi-source drug and the greater of 5% or $8.35 for all other drugs in 2018.
Maximum Co-payments below the Out-of-Pocket Threshold for certain Low Income Full Subsidy Eligible Enrollees:
will increase to $3.35 for generic or preferred drug that is a multi-source drug and $8.35 for all other drugs in 2018.
The federal government subsidizes the Part D program. Due to limited income and financial resources, some people may qualify for the Medicare Part D Low Income Subsidy, known as “Extra Help“. You can find out more about Extra Help from your Social Security office.