2014 Medicare Part D Plans
Medicare Part D plans provide prescription drug coverage to eligible beneficiaries. The benefits, costs, and availability of these plans will vary by location and which private insurance company is offering the plan. Additionally, these plans may also change each year, which means that beneficiaries should expect changes for 2014 Medicare Part D plans.
Medicare Part D plans are available as stand-alone Prescription Drug Plans (PDPs) and Medicare Advantage Prescription Drug (MAPD) plans. To qualify to enroll in Medicare Part D, beneficiaries must be enrolled in Medicare Part A and/or Part B and reside in the plan's service area. Beneficiaries are not required to enroll in a Medicare Part D plan, but if they do not have creditable drug coverage and go 63 consecutive days or more without creditable coverage, they may have to pay a late enrollment penalty when they decide to enroll in the future.
2014 Medicare Part D costs
Beneficiaries pay an additional amount out-of-pocket for Medicare Part D coverage. Each plan sets its own monthly premium and copayment amounts, but the Centers for Medicare & Medicaid Services determines other costs on an annual basis. 2014 Medicare Part D costs will change in the following ways:
- The yearly deductible will be decreased by $15 to $310
- The initial coverage limit will decrease from $2,970 to $2,850
- The out-of-pocket threshold will decrease from $4,750 to $4,550
2014 Medicare Part D donut hole
Once beneficiaries has paid for their annual deductible and they and their plans have reached the initial coverage limit by paying $2,850 on covered drugs, they will then enter the 2014 Medicare Part D donut hole. Within this coverage gap, beneficiaries are responsible for the full cost of their prescription drug coverage. In 2014, beneficiaries will continue to receive a 52.5% discount on covered brand-name drugs and will be responsible for paying a maximum of a 72% copayment for generic drugs. Please note that beneficiaries who get Extra Help paying for Part D costs will not enter the Part D donut hole.
After beneficiaries have spent a total of $4,550 on their prescription drugs in the donut hole, they will then enter the catastrophic coverage period, during which they are responsible for little to none of the costs of their medications. In 2014, plans may charge no more than a $2.55 copayment for generic or preferred drugs with a retail price under $51, and no more than 5% of the total cost of those with a retail price greater than $51, as stated by the Center of Medicare and Medicaid Services (CMS). Additionally, the government also requires that plans not charge more than a $6.35 copayment for brand-name drugs with a retail price under $127, and no more than 5% of the total cost of drugs with a retail price over $127.
Each Medicare Part D plan has its own list of covered drugs, known as a formulary. Because each plan covers a different set of prescription drugs, beneficiaries should compare plans in their area based on drug coverage and costs. Additionally, while plan deductibles and coverage gap amounts are set by the government, some insurance companies may offer Part D plans that provide additional assistance in the 2014 Medicare Part D donut hole. Beneficiaries may also qualify for the low-income subsidy (LIS), also known as the Extra Help program, which is a governmental program that provides assistance with prescription drug costs. As stated above, beneficiaries in the Extra Help program will not fall into the Medicare donut hole.
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Medicare Advantage Plans, sometimes called "Part C" or "MA Plans," are offered by private companies approved by Medicare and provide Medicare Part A and Part B coverage. Medicare prescription drug coverage is insurance run by an insurance company or other private company approved by Medicare. A Medicare Supplement plan is a health insurance plan provided by a private company that fills in the "gaps" in original Medicare coverage.