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MEDICARE PRESCRIPTION DRUGS (PART D)

medicare prescription drugs part d

Does Medigap Cover Prescription Drugs?

One thing we’re often asked is, “Does Medigap cover prescription drugs?” The answer is no. It is now required that you obtain a stand-alone Prescription Drug Plan (PDP), which is also known as Part D Medicare.

Medicare Prescription Drugs (Part D)

Medicare Part D is offered exclusively by private insurance company entities with legal agreements with the government and is never available directly through the government itself.  Those wanting to enroll in Medicare Part D should pick Part D coverage that is compatible with their Medicare health benefits.  For those who already have Original Medicare, you must then pick a standalone Part D plan.  Enrollment separate from the Open Enrollment is generally October 15 – December 7 every year (aka Annual Enrollment Period [AEP]).  In the event that a Part D plan isn’t chosen when eligible, a penalty of 1% each month that you were eligible for the plan (but opted out) will then be issued, which you will be paying separately from Medicare should you wish to enroll in a Medicare Part D plan at a later date.  Next, we will cover the 3 phases of coverage pertaining to Medicare Part D: Initial coverage, donut hole and catastrophic.  It’s highly important to be informed about these phases, especially in the event that you require high cost for Rx drugs.

The initial coverage phase gets outlined with the Part D Plan that you choose.  It consists of deductibles, copays and coinsurance that the beneficiary must pay and adhere to until reaching the Initial Coverage Limit.  The Initial Cover Limit in 2021 for a beneficiary’s Rx drug expense is $4,130 and in 2022 for a beneficiary’s Rx drug expense is $4,430 , which gets calculated by the full retail price of the beneficiary’s Rx drug, as opposed to the amount spent out-of-pocket.  Once the limit is reached, the beneficiary will then proceed into the Donut Hole phase.

The Donut Hole phase begins upon hitting the initial coverage limit, and you are then required to pay the full price of your Rx drugs until reaching the total out-of-pocket expense.  In 2021, the total out of pocket requirement was $6,550 and In 2022 it will be $7,050.  When this amount is reached, the Catastrophic phase comes into play.

The Catastrophic phase of Medicare Part D continues after this point, which allows the beneficiary to pay outlined copays.  This reduces your cost substantially until the next calendar year.  At that point, everything resets and starts with the new year’s outline of benefits for the current plan.

Still have questions? Please feel free to contact our licensed Medicare agents today.  We’re here to answer any and all questions, including: “Does Medigap cover prescription drugs?” Our team represents 98% of the market, and for the remaining 2%, we can still provide you with rates.  Our service is completely FREE with NO OBLIGATION.  Contact us today!

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2022-2011 Medicare Part D Standard Benefit Model Plan Parameters

Below is a comparison of the Standard Benefit
Model Plan parameters as released by The Centers for Medicare and Medicaid
Services (CMS) for the plan years 2022 through 2011.

 

Medicare Part D Benefit Parameters for Defined Standard
Benefit
2011 through 2022 Comparison

Part D Standard
Benefit Design Parameters:

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

Deductible – After the Deductible is met,
Beneficiary pays 25% of covered costs up to total prescription costs meeting
the Initial Coverage Limit.

$480

$445

$435

$415

$405

$400

$360

$320

$310

$325

$320

$310

Initial Coverage
Limit
 – Coverage Gap
(Donut Hole) begins at this point. (The Beneficiary pays 100% of their
prescription costs up to the Out-of-Pocket Threshold)

$4,430

$4,130

$4,020

$3,820

$3,750

$3,700

$3,310

$2,960

$2,850

$2,970

$2,930

$2,840

Out-of-Pocket
Threshold 
– This is the Total
Out-of-Pocket Costs including the Donut Hole.

$7,050

$6,550

$6,350

$5,100

$5,000

$4,950

$4,850

$4,700

$4,550

$4,750

$4,700

$4,550

Total Covered
Part D Drug Out-of-Pocket Spending including the Coverage Gap
 – Catastrophic Coverage starts after
this point.

See note (1) below.

$10,012.50 (1)

$9,313.75 (1)

$9,038.75 (1)

$7,653.75 (1)

$7,508.75 (1)

$7,425.00 (1)

$7,062.50 (1)

$6,680.00 (1)

$6,455.00 (1)

$6,733.75 (1)

$6,657.50 (1)

$6,447.50 (1)

Total Estimated
Covered Part D Drug Out-of-Pocket Spending including the Coverage Gap
Discount (NON-LIS)
 See note (2).

$10,690.20

plus a 75% discount on all formulary drugs

$10,048.39

plus a 75% discount on all formulary drugs

$9,719.38

plus a 75% discount on all formulary drugs

$8,139.54

plus a 75% brand discount

$8,417.60

plus a 65% brand discount

$8,071.16

plus a 60% brand discount

$7,515.22

plus a 55% brand discount

$7,061.76

plus a 55% brand discount

$6,690.77

plus a 52.50% brand discount

$6,954.52

plus a 52.50% brand discount

$6,730.39

plus a 50% brand discount

$6,483.72

plus a 50% brand discount

Catastrophic Coverage Benefit:

Generic/Preferred
Multi-Source Drug (3)

$3.95 (3)

$3.70 (3)

$3.60 (3)

$3.40 (3)

$3.35 (3)

$3.30 (3)

$2.95 (3)

$2.65 (3)

$2.55 (3)

$2.65 (3)

$2.60 (3)

$2.50 (3)

Other Drugs (3)

$9.85 (3)

$9.20 (3)

$8.95 (3)

$8.50 (3)

$8.35 (3)

$8.25 (3)

$7.40 (3)

$6.60 (3)

$6.35 (3)

$6.60 (3)

$6.50 (3)

$6.30 (3)

Part D Full Benefit Dual Eligible (FBDE) Parameters:

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

• Deductible

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

• Copayments for
Institutionalized Beneficiaries

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

Maximum Copayments for Non-Institutionalized Beneficiaries

Up to or at 100% FPL:

• Up to Out-of-Pocket Threshold

– Generic /
Preferred Multi-Source Drug

$1.35

$1.30

$1.30

$1.25

$1.25

$1.20

$1.20

$1.20

$1.20

$1.15

$1.10

$1.10

– Other Drugs

$4.00

$4.00

$3.90

$3.80

$3.70

$3.70

$3.60

$3.60

$3.60

$3.50

$3.30

$3.30

• Above
Out-of-Pocket Threshold

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

Over 100% FPL:

• Up to Out-of-Pocket Threshold

– Generic /
Preferred Multi-Source Drug

$3.95

$3.70

$3.60

$3.40

$3.35

$3.30

$2.95

$2.65

$2.55

$2.65

$2.60

$2.50

– Other Drugs

$9.85

$9.20

$8.95

$8.50

$8.35

$8.25

$7.40

$6.60

$6.35

$6.60

$6.50

$6.30

• Above
Out-of-Pocket Threshold

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

Part D Full Subsidy – Non-Full Benefit Dual Eligible Full
Subsidy Parameters:

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

Eligible for QMB/SLMB/QI, SSI or applied and income at or below 135% FPL and resources ≤ $9,470 (individuals in 2021) or ≤ $14,960 (couples, 2021) (4)

• Deductible

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

• Maximum Copayments up to Out-of-Pocket Threshold

– Generic /
Preferred Multi-Source Drug

$3.95

$3.70

$3.60

$3.40

$3.35

$3.30

$2.95

$2.65

$2.55

$2.65

$2.60

$2.50

– Other Drugs

$9.85

$9.20

$8.95

$8.50

$8.35

$8.25

$7.40

$6.60

$6.35

$6.60

$6.50

$6.30

• Maximum Copay
above Out-of-Pocket Threshold

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

$0.00

Partial Subsidy Parameters:

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

Applied and income below 150% FPL and resources between $14,790 (individual, 2021) or $29,520 (couples, 2021) (category code 4) (4)

• Deductible

$99.00

$92.00

$89.00

$85.00

$83.00

$82.00

$74.00

$66.00

$63.00

$66.00

$65.00

$63.00

• Coinsurance up to
Out-of-Pocket Threshold

15%

15%

15%

15%

15%

15%

15%

15%

15%

15%

15%

15%

• Maximum Copayments above Out-of-Pocket Threshold

– Generic /
Preferred Multi-Source Drug

$3.95

$3.70

$3.60

$3.40

$3.35

$3.30

$2.95

$2.65

$2.55

$2.65

$2.60

$2.50

– Other Drugs

$9.85

$9.20

$8.95

$8.50

$8.35

$8.25

$7.40

$6.60

$6.35

$6.60

$6.50

$6.30

(1) Total Covered Part D Spending at Out-of-Pocket Threshold for Non-Applicable Beneficiaries – Beneficiaries who ARE entitled to an income-related subsidy under section 1860D-14(a) (LIS)

(2) Total Covered Part D Spending at Out-of-Pocket Threshold for Applicable Beneficiaries – Beneficiaries who are NOT entitled to an income-related subsidy under section 1860D-14(a) (NON-LIS) and do receive the coverage gap discount. For 2022, the weighted gap coinsurance factor is 89.1745%. This is based on the 2020 PDEs (91.76% Brands & 8.24% Generics)

(3) The Catastrophic Coverage is the greater of 5% or the values shown in the chart above. In 2022, 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.

(4) This amount includes the $1,500 per person burial allowance. The resource limit may be updated during contract year 2022.

 

Standard_CMS_Part_D_Benefit_Changes