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November 15, 2018

Is Medicare Part D Right for Me?


On July 31, 2018, the Centers for Medicare & Medicaid Services (CMS) shared that the average basic premium for Medicare Part D—the prescription drug plan—is expected to decline for the second year in a row. The basic premiums should drop from $33.59 monthly in 2018 to $32.50 in 2019.

As part of Medicare Part D, you can select the prescription drug plan that most closely dovetails with your needs. And, earlier in 2018, the CMS announced multiple changes in this plan that were designed to provide a better value for beneficiaries. These include more pharmacy options for people enrolled in a Part D plan, as well as that:

  • Certain low-cost generic drugs could be added to the plan at any point during the year to help plan members benefit immediately
  • Part D plans no longer need to “meaningfully differ” from one another; this is what is making more options available now

CMS has stated that this premium decline is because of how the federal government has pressured prescription drug manufacturers to provide more value. As the government focuses on boosting competition among companies that supply prescription medications, the goal is to provide people enrolled in Medicare with better pricing.

Another article points out that Medicare participants who have higher incomes will receive an additional break, this time on their surcharges. Typically, single taxpayers who have an income above $85,000 or joint filers with incomes of at least $170,000 have paid surcharges anywhere from $13 to $74.80 per month—and that’s expected to decrease in 2019, other than for single taxpayers with income of $500,000 or more annually and for joint filers with income of $750,000 or more annually.

But, what will Medicare plans cover?

Will, for example, this reduction in monthly premiums also mean a reduction in coverage? Will there be a bigger deductible? Larger co-pay? Will fewer prescription drugs be covered? Stay tuned! As open enrollment begins for Medicare, pay close attention to what each of the plans cover before making your decision.

Also take a look at our summary of an article in Forbes.com that offers some analysis about what is anticipated, including but not limited to the Medicare prescription coverage gap, known as the “donut hole.” While in this hole, you may pay higher prices for medications, both brand-name and generic.

If you’re enrolled in Medicare in 2019, for example, here are anticipated changes in what plans may cover:

  • Standard initial deductibles are expected to increase by $10, from $405 to $415. This indicates how much you’ll pay out of pocket before Medicare Part D coverage kicks in.
  • The initial coverage limit of $3,750 is expected to increase by $70 to $4,820. This means you can buy more medications in 2019 before you reach the coverage gap in this plan; here is a more detailed explanation by Forbes.com. This is “the period in which your prescription drug costs have exceeded the initial coverage limit of your plan. Once you’ve reached this donut hole period, you are responsible for covering the full cost of your drugs. Once the total cost of your prescription drugs reaches your yearly out-of-pocket spending limit, however, you will become responsible for just a small percentage of the drug costs.”
  • Once you reach this coverage gap, you’ll pay less for generic medications.
  • At that point, brand-name drug discounts should also increase.

You can find significantly more analysis in the Forbes.com article, and here is more information about Medicare Part D in 2019, including how to select a plan that covers the medications you need.

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