Changes to Medicare Part D take effect for 2024 Part C and Part D plans.
Members with Part D coverage from a Medicare Advantage Prescription Drug plan (Part C) or standalone Prescription Drug Plans will experience changes set by the Center for Medicaid and Medicare Services (CMS) for 2024.
All Part D plans are made up of Stages. The first stage is paying your plan's deductible, if (or when) applicable. This is when you pay the full costs of your prescriptions until your deductible is satisfied. After you move to the second stage, the Initial Stage, where you pay set copayments or coinsurances based on where your prescriptions fall in your plan's Tier structure. Most plans are made up of 5 Tiers (preferred generics, non-preferred generics, preferred brand, non-preferred brand, and specialty drugs). The third stage is the Coverage Gap commonly referred to as the "Donut Hole". Followed by the final and fourth stage, Catastrophic Phase.
Deductible and Initial Stage
For 2024, the maximum deductible amount for Part D can be as high as $545. Not every plan has a deductible. Some plans may only require the deductible to be paid for specific Tiers of the plan.
After your deductible is satisfied, you pay set copayments and coinsurances in the Initial Coverage for each prescription. The copayments and coinsurance vary plan by plan. Copayments are always expressed as dollar amounts and coinsurance as percentages. Once the total drug costs reach $5,030. You will move to Coverage Gap. Total drug costs is how much both you and the plan pay for the prescription.
For example, if a drug retails for $100 and your copayment is $5, the plan pays $95 and you pay $5. The total drug cost is $100 which goes towards the $5,030 total.
The Donut Hole
Coverage Gap (AKA the Donut Hole) still will exists in 2024 after you reach $5,030 in total drug costs. Once a member reaches the Donut Hole, they can expect to pay 25% for each drug. Individuals can expect to remain in the donut hole until the member's annual out-of-pocket costs reach $8,000.
It is important to know, some Part D or Part C plans, may offer set copayments during the Donut Hole stage with significantly lower copayments than the 25% of the costs of their medication. These plans may have significant savings for individuals with higher prescription costs.
Goodbye Catastrophic Phase!
While technically still in the Catastrophic Phase, once an individual has a true out of pocket expense (TrOOP) of $8,000 in 2024, Medicare and the member's plan are required to pay the full costs of the prescriptions for the remainder of the calendar year. TrOOP is the combination between the member's payments (deductible, copayments, and coinsurance) and the manufacturer discounts. Therefore, members are only responsible for a portion of the $8,000 during the plan year 2024.
Ways to Save
Shopping during Medicare's Annual Enrollment Period (AEP) with a licensed insurance broker who represents multiple plans is a great way to look at lowering costs for 2024. There are other programs to help lower prescription drug costs we can explore with you. Extra Help and PACE/PACENET are pharmaceutical assistance programs based on income and/or resources limits.
Be Prepared
Each September, Medicare contracted insurance carriers begin sending out their Annual Notice of Changes (ANOC) to their members indicating changes to their plan for the next plan year. Please ensure you review your ANOC closely and contact your broker with any questions.
We'd be happy to discuss with you ways to save on your prescriptions, help you explore lower costs plans, and be a resource for your Part D Medicare coverage. Not all plans are made equally and our job is finding the coverage that works for you.
To speak to a licensed insurance agent specializing in Medicare Part D coverage, click the button below for our contact information or to fill out a form for us to contact you. Don't worry, we don't share your information or use a robo-dialer to call you. You'll speak to a human who understands your market. It's part of our pledge! There's never a charge for our services.
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