Part D Plans in 2017 – Must Know Changes to Drug Coverage
Every year, Medicare Part D (Prescription Drug Coverage) undergoes changes that are important to track. These changes may directly affect your current plan. In 2017, you may see a higher deductible and initial coverage limits if you have a Standard Benefit Plan, along with other changes we will expand on below.
You may also see an increase in your premium. According to the Kaiser Family Foundation, the average monthly stand-alone prescription drug plan premium will increase by 9 percent for a total of $42.17.
Below, you will find a breakdown of all changes coming to Part D plans in 2017, as well as changes that took place in 2016.
Cost changes to Part D plans in 2017
If you compare the 2017 Standard Benefit Plan to the 2016 version, you will see changes across the board. Here are a few highlights of the Standard Benefit changes in 2017.
- $40 increase in deductible: $360 in 2016 to $400 in 2017.
- $390 increase in initial coverage limit: $3,310 in 2016 to $3,700 in 2017.
- $100 increase in out-of-pocket threshold: $4,850 to $4,950
- Increase in minimum copayment in catastrophic coverage portion of the benefit.
2017 deductible cost: $400
Each year, Medicare establishes a maximum deductible amount. For 2017, that amount is $400. Your deductible is the amount you’re responsible to pay each year for your prescription drugs before you enter the initial coverage period and Part D begins helping you pay for drugs.
Initial coverage limit: $3,700
Once your total yearly drug costs total the Initial Coverage Limit (ICL) of $3,700, you leave the initial coverage period and enter the Donut Hole, or Coverage Gap. Total yearly drug costs include the costs for covered medication paid by you and your prescription drug plan.
Coverage gap (donut hole) costs in 2017
This is the percentage you pay for covered prescription drugs after you reach the initial coverage limit amount of $3,700 and are in the Donut Hole, or Coverage Gap. When you are in the Coverage Gap, there is a temporary change in what you will pay for drugs. During the Coverage Gap, you pay 40% of the plan’s costs for covered brand-name drugs and 51% for covered generic drugs. Most drug plans have a coverage gap.
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.
Part D out-of-pocket threshold: $4,950
Once your spending on prescription drugs (including manufacturer discounts) reaches this amount, you are out of the Donut Hole and reach Catastrophic Level Coverage. During this phase, you will pay the greater of 5% or $3.30 for covered generic drugs. You’ll also pay the greater of 5% or $8.25 for all other covered drugs until the end of the calendar year.
Minimum copayment in catastrophic coverage portion of the benefit
The greater of 5% of the cost or $3.30 for covered generic or preferred multi-source drugs, and the greater of 5% of the cost or $8.25 for all other covered drugs until the end of the calendar year. This helps ensure that you only pay a small amount for drugs covered by Part D for the rest of the year while you are in catastrophic level coverage.
Other changes to Part D plans in 2017
Improved reflection of Advantage plans serving vulnerable beneficiaries
New policies for 2017 work towards improving the accuracy of payments to Advantage plans for more vulnerable beneficiaries, including those who are dually Medicare-Medicaid eligible and beneficiaries with complex socio-economic needs. CMS has altered methodology in order to more accurately show the cost of care for dually eligible beneficiaries, according to this CMS press release. CMS will also adjust Star Ratings of plans to more accurately present the socio-economic and disability status of a plan’s enrollees. Finally, CMS has finalized policies to stabilize the Advantage program in Puerto Rico.
Prescribers will be required to be enrolled or “opt-out”
The Official U.S. Government Site for Medicare notes that almost all prescribers are required to be enrolled in or have an “opt-out” request on file with Medicare, starting in 2017. Otherwise, your prescriptions won’t be covered by your Part D prescription drug plan. If your prescriber isn’t enrolled yet and hasn’t opted-out, then you’ll be allowed a 3-month provisional fill of your prescription. This will give you time to either find a new prescriber who’s enrolled or has opted out, or give your prescriber time to enroll. You should speak with your plan or prescribers to learn more.
Reduction in the overuse of opioids
CMS is working on reducing the overuse of opioids among Part D beneficiaries in 2017 by encouraging safeguards before pharmacies distribute opioid prescriptions and continuing to provide access to prescribed medications.
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Changes in 2016
In 2016, many Part D beneficiaries saw rises in their costs, including premiums, deductibles and cost-sharing requirements. Medicare has something called the “Medicare Part D Standard Benefit Plan,” which establishes the minimum allowable benefit for Medicare Part D plans. Here some of the primary changes to the Part D Standard Benefit Plan costs from 2015 to 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 Part D plans: From 1,001 in 2015 to 886 in 2016. (115 fewer plans)
How to switch plans each year
If you’re not happy with the changes made to your Medicare Part D plan this year, you can switch prescription drug plans. In most cases, the only time you can switch your Part D plan is during Open Enrollment, from October 15 to December 7. Your new plan will become effective January 1.
If you have prescription drug coverage through an Advantage Plan, you may also be able to switch from an Advantage Plan to Original Medicare during the Medicare Advantage Disenrollment Period (MADP). This period occurs from January 1 to February 14 every year. You can join a prescription drug plan when you switch to Part A and Part B during the MADP. If you make changes during the MADP, they will become effective the first day of the next month.
There are additional times that you may be able to change prescription drug plans, called Special Enrollment Periods (SEPs). You can find out if you qualify to make changes during a SEP here.
Comparing prescription drug plans
While there is a Standard Part D Benefit Plan, plans can vary based on their benefit design, cost-sharing amounts, covered drugs, and more. This is why it’s important to compare plan benefits, carriers and costs whether you are switching prescription drug plans or enrolling in a Part D plan for the first time.
‡ This information is not a complete description of benefits. Contact the plan for more information. Limitations, copayments, and restrictions may apply. Benefits, premiums, deductibles, and/or copayments/coinsurance may change on January 1 of each year.