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Medicare Part D

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Medicare Part D 2017 Plan Benefits  – Standard

Medicare Part D plans must cover at least the standard benefit or its actuarial equivalent.

Medicare Part DFor 2017, the standard benefit requires the beneficiary to pay:

  • $400 deductible
  • 25% of prescription drug costs between $400 and $3,700 = $825
  • Part of the costs in the “Coverage Gap” (also known as the donut hole) – After total spending on drugs by the beneficiary and the plan reaches $3,700 ($3,310 in 2016) the beneficiary pays for 51% of generic drug costs and 40% of brand name brand drug costs (undiscounted).

→  Drug manufacturers provide a 50% discount on brand-name drug costs.
→  In 2010 a new law was enacted that will reduce significantly the coverage gap by 2020.

This will be done by reducing the amount beneficiaries pay while in the coverage gap by a small percentage each year until 2020 when they will be responsible for only 25% of brand and generic drug costs.

  • Nominal costs under catastrophic coverage: Once the beneficiary expenditures (including drug manufacturer discounts) reach a total of $4,950 ($4,850 in 2016), the beneficiary is the coverage gap and reaches catastrophic level coverage. On any future prescriptions, the beneficiary pays either a co-pay of $3.30 for generic drugs or $8.25 for brand name drugs or a co-insurance of 5%, whichever is greater.

The Medicare Part D benefits must be at least as good as the standard coverage.  Some Part D plans have enhanced coverage for an additional monthly premium.  Some Part D plans will have no deductibles as well.