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Medicare Part D 2016

Medicare Part D, or Prescription Drug Coverage, helps beneficiaries pay for the costs of
prescription drugs. If you are a Medicare beneficiary, Medicare Part D is optional. However, if you don’t enroll in Medicare Part D when you are first eligible and decide you want it in the future, you may have to pay a late enrollment penalty. You can get prescription drug coverage through Medicare Part D, a Medicare Advantage plan, Extra Help, or other creditable prescription drug coverage.

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Every year, Medicare Part D features changes that you need to stay on top of. If you have a Medicare Part D 2016 Standard Benefit Plan, you may experience higher initial deductibles and initial coverage limits, among other changes. The “Standard Benefit Plan” establishes the minimum allowable benefit. Medicare Part D Plans must offer equal benefit, provide an alternative that is equal in value or offer better benefits.

Find new information about Medicare Part D changs in 2017 here!

The 2016 Medicare Part D Standard Benefit Plan Costs

The Medicare Part D standard benefit plan requires the beneficiary to pay the following in 2016:

Initial deductible


This is the amount of money you are required to pay yearly for your prescription drugs before Medicare Part D starts paying for them

Prescription drug copayment/coinsurance

25% of prescription drug costs between $360 and $3,310.

This is the amount you are required to pay for your prescription drugs after you have paid your deductible.

Coverage Gap (Donut Hole) Costs

When you reach your Medicare Part D plan’s initial coverage limit, which is $3,310 in 2016, you enter the coverage gap, or donut hole. When in the donut hole, you must pay 58% of generic drug costs and you get a 55% discount on the cost of brand name drugs. The donut hole ends when you spend a total of $4,850.

Drug manufacturers offer a 50% discount on brand name drug costs, which can work towards getting you out of the donut hole.

Each year, the amount beneficiaries pay while in the donut hole will reduce by a small percentage until 2020, when the coverage gap is planned to be eliminated. In 2020, you will only be responsible for 25% of brand and generic drug costs. This is part of a new law enacted to eliminate the donut hole by 2020.

Nominal costs under catastrophic coverage

Once your spending (including drug manufacturer discounts) reaches a total of $4,850, you are through the coverage gap and reach catastrophic level coverage. When you buy future prescription drugs, you pay either a co-pay of $2.95 for generic drugs, $7.40 for brand name drugs or a coinsurance of 5%, whichever is greater.

This coverage helps you to pay only a small amount for drugs covered by Medicare Part D for the remainder of the year.

Medicare Part D late enrollment penalty

Although the cost of the penalty varies based on how long you go without Medicare Part D or other creditable prescription drug coverage, the national base beneficiary premium remains the same. In 2016, the national base beneficiary premium is $34.10.

You can calculate your penalty for late enrollment in Medicare Part D 2016 by multiplying 1% of $34.10 times the number of full months you were not covered by Part D or creditable coverage. You then round this number up to the nearest $0.10 to get your late enrollment penalty for 2016.

Medicare Part D Changes in 2016

Many Medicare Part D beneficiaries saw a rise in premiums, along with increases in deductibles and cost-sharing requirements, when they remained with the same plan they had in 2015. Here are details of the Medicare Part D changes in 2016.

  • Increase in initial deductible for standard benefit plans: From $320 in 2015 to $360 in 2016. ($40 increase)
  • Increase in initial coverage limit for standard benefit plans: From $2,960 in 2015 to $3,310 in 2016. ($350 increase)
  • Increase in out-of-pocket threshold for standard benefit plans: From $4,700 in 2015 to $4,850 in 2016. ($150 increase)
  • Increase in nominal costs under catastrophic coverage for standard benefit plans.
  • Increase in national base beneficiary premium: $33.13 in 2015 to $34.10 in 2016. ($0.97 increase)
  • Decrease in the number of Medicare Part D plans: From 1,001 in 2015 to 886 in 2016. (115 less plans)

How to Join or Switch Medicare Part D 2016 Plans

If you’ve been hit with costly changes in 2016 and want to switch Medicare Part D plans, or if you’re looking to join your first Medicare Part D plan, we can help. You can get drug coverage in two ways: by joining Medicare Part D or enrolling in a Medicare Advantage Plan that offers Medicare prescription drug coverage.

Whether you are switching plans or getting your first Medicare Part D Plan, our licensed agents can help you find a cost-effective plan in your area. Call  855-802-1206  to speak to our licensed agents now. We are available to speak with you from 6am – 6pm MST, Monday through Friday.

Looking for more general information about Medicare Part D plans? Head over to our Medicare Part D page here!

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