A major change to PDP plans are coming in 2025 with the discontinuation of the Medicare Donut Hole. The coverage design for prescription drugs beginning in 2025 will include three phases as described below.
1. Annual Deductible Phase: During this phase beneficiaries will pay one hundred percent of the cost of their drugs until they reach the amount of $590 for drug costs on the year.
2. Standard Coverage Phase: For this phase it is a combination of the initial coverage phase and donut hole phase for 2024. Once the beneficiary reaches the out-of-pocket threshold of $2,000 for the year, they will immediately move on to the catastrophic coverage phase.
3. Catastrophic Coverage Phase: Once this phase is reached, the beneficiary will have no cost sharing for Medicare part D drugs they pick up.
The payment responsibility structure has also changed for the upcoming year. During the first phase enrollees are responsible for the entire amount. During phase two enrollees pay 25% coinsurance for covered drugs while the plan will pay for 65-75% of applicable drugs under Part D. The manufacturer typically will pick up 10% of the costs via discount programs. Finally, in phase three as mentioned the beneficiary will pay nothing while while the cost is split between plan sponsors, manufacturers and CMS.
This is a major change to the PDP plan structure. If you have questions about how this ruling could affect you, as always reach out to a Poindexter representative.
