In the fall of the year, the Part D deductibles are set for the following year. This has been completed for 2017, so let’s review the details of Part D 2017.
$400 Initial Deductible — This deductible for 2017 has risen $40 from 2016. After this point, the Plan enters the initial coverage limit phase.
$3700 Initial Coverage Phase — Once past the deductible, you will be accruing drug costs against this phase. When you purchase a drug, the total cost is used to determine the amount added to the coverage until the $3700 limit is reached. Once you have reached this limit, you are in the coverage gap.
Coverage Gap — When the coverage gap is reached, the costs of your medications are adjusted. For 2017, brand-name drugs receive a 60% discount, and generics are given a 49% discount. For brand-name drugs, this is a 5% improvement from 2016.
Coverage Limit — This is the catastrophic limit for years when your medical costs are higher than expected. For 2017 this limit is $4950 then you only pay 5% of any drug costs for the remainder of the year. Any discounts offered by the drug companies count toward this limit, so you can reach it more quickly than many believe.
More Savings are Coming — The Affordable Care Act includes a gradual reduction in the amount you will pay for generic and branded drugs through 2020. Assuming the Act is not amended by future administrations, you can expect to pay only 25% of drug costs when you are in the coverage gap.
If you have questions about Medicare, Medicare supplements, or Part D, contact the Insurance Hub today. We have specialists who can talk all things Medicare, and can help you choose the best plans to meet your needs.