If you have signed up for a drug plan or plan to do so soon, here are a few changes that you can expect with the standard Medicare Part D prescription drug coverage for 2018.
Increase In Standard Initial Deductible
For 2018, the standard initial deductible for Medicare Part D will go up slightly by only $5 from $400 to $405. This means if you enroll in a Medicare Part D prescription drug plan with a standard initial deductible, the amount that you pay out-of-pocket before your Medicare Part D plan starts to share the cost of coverage is $405.
Increase In Medicare Part D’s Initial Coverage Limit (ICL)
The Initial Coverage Limit in 2018 will increase by $50 from $3,700 in 2017 to $3,750. In other words, once you obtain $3,750 in prescription drugs in 2018, your drug coverage will stop paying for drugs until you reach the other side of the “donut hole”, which is known as catastrophic coverage.
Medicare Donut Hole Discount Will Increase For Generic Drugs
Though your plan won’t pay for your prescriptions while you are in the donut hole, you will receive a discount. The 2018 Medicare donut hole discount for generic medication will increase from 49 percent in 2017 to 56 percent in 2018. If you are in the 2018 donut hole and your generic drugs cost you $100, then you will pay $44 for that prescription drug.
Donut Hole Discount For Brand-Name Drugs Will Increase
The brand-name drug discount for 2018 will increase from 60 percent to 65 percent, you will also receive 50% drug manufacturer discount, and 35% of the brand-name retail cost you spend toward meeting your 2018 donut hole exit point. This means if you acquire a brand-name medication with a retail price of $100, you will pay $35 for the medication when you reach the 2018 Donut Hole.
Medicare Part D Total Out-of-Pocket or TrOOP Costs Increase
The Total Out-of-Pocket (TrOOP) limit will increase by $50, going from $4,950 to $5,000 in 2018. The TrOOP is the total amount of prescription drugs you will have obtained before you get out of the Coverage Gap or donut hole, and into the Medicare Part D plan Catastrophic Coverage phase.
Increase In Minimum Cost Sharing Of The Catastrophic Coverage Phase
You will enter the 2018 Catastrophic Coverage phase once you have exceeded the TrOOP phase. You will now pay $8.35 for brand-name drugs or $3.35 for generics. This increase is slightly more than the $8.25 and $3.30 paid in 2017.
No 2018 Medicare Advantage Plans Have A Maximum Out-Of-Pocket Limit Higher Than $6,700
The Centers for Medicare and Medicaid Services sets a limit on how high a Medicare Advantage plan can set their Medicare Part A and B Maximum Out-of-Pocket limit (MOOP). Your share of your covered healthcare bills will not exceed the limit of $6,700 for in-network cost sharing.
Part D coverage is voluntary, and signing up could provide you with significant benefits that allow you to maintain a healthier lifestyle. You may sign up or change your Part D coverage when you are first eligible for Medicare, or during the Annual Election Period from October 15 – December 7. If you don’t sign up for Medicare Part D Coverage when you are first eligible, you’ll have to pay a penalty for late-enrollment if you decide to enroll later.
Make sure you review your current plan and see if it still fits your current health care needs. If you miss out changing your Medicare Part D plan during the annual election period this coming October 15, you will have to stick with your current coverage for another year.
Wiley Long is founder and president of Medigap Advisors, and is passionate about helping people navigate the confusing waters of Medicare. He is the author of The Medicare Playbook: Designing Your Successful Health Coverage Strategy, a clear and simple explanation so you can make the most of your Medicare coverage. For more information visit www.MediGapAdvisors.com.