Medicare plans that include prescription drug coverage will vary by location and which Medicare-approved private insurance company is offering the plan. Additionally, these plans may also change each year, which means that beneficiaries should expect changes for 2018 Medicare Part D.
Medicare plans that include prescription drug coverage are available as stand-alone Medicare Prescription Drug Plans (if you decide to remain with Original Medicare), or may choose to enroll in a Medicare Advantage Prescription Drug plan. 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 plan that includes prescription drug coverage, but if they do not have creditable prescription 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.
2018 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. 2018 Medicare Part D costs will be:
- The yearly deductible will be no higher than $405 in 2018
- The initial coverage limit will be $3,750
- The out-of-pocket threshold (catastrophic coverage limit) will be $5,000
2018 Medicare Part D coverage gap
Once beneficiaries have paid for their annual deductible and they and their plans have reached the initial coverage limit by paying $3,750 on covered drugs, they will then enter the 2018 Medicare Part D coverage gap (also known as the “donut hole“). Within this coverage gap, beneficiaries are responsible for the full cost of their prescription drug coverage. Please note that beneficiaries who get Extra Help paying for Part D costs will not enter the Part D coverage gap.
Each Medicare plan that includes prescription drug coverage has its own list of covered prescription drugs, known as a formulary. (A formulary may change at any time. You will be notified when necessary.) Because each plan covers a different set of prescription drugs, beneficiaries should compare plans in their area based on prescription drug coverage and costs. Additionally, while plan deductibles and coverage gap amounts are set by the government, some insurance companies may offer Part D additional assistance in the 2018 Medicare Part D coverage gap. 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 coverage gap.