Medicare Part D Deductibles
Medicare Part D is required for beneficiaries to carry, given they do not have other creditable drug coverage at the time their enrollment window opens. The Part D drug plans for prescription drug coverage (PDP) are offered by private insurance companies that are approved by Medicare and CMS. Most PDP plans carry some level of a deductible, or out-of-pocket expense the beneficiary must pay prior to the plan beginning their cost sharing portion. Once the deductible phase is satisfied the Medicare beneficiary will then be required to pay either copays or coinsurance for their drugs depending on where the drug is placed in the PDPs formulary.
How Do Deductibles Work?
The majority of Part D plans carry an annual deductible that must be satisfied prior to the private company paying their cost sharing portion. Some plans have low level or no deductible, while the highest deductible for 2024 is $545. For PDPs with no deductible, coverage begins immediately. How is the deductible satisfied? The full cost of each drug must be paid until that threshold is met. After the deductible is met, the payment amount again, varies depending on the payment structure and where each prescription drug is placed in the plan's formulary.
Drug Formulary Overview
Part D drugs are categorized differently within a tier structure, with different costs associated with the tiers. The tiers range from 1 to 6, with drugs lower on the scale the copay will be cheaper and these types of drugs tend to be generic. Higher tier drugs tend to be name brand or specialty drugs and will be more expensive as far as copays/coinsurance goes. Some drugs may even me listed as 'non-formulary' if they are extremely expensive specialty drugs, for 'non-formulary' drugs the beneficiary is required to pay the full amount for the drug regardless of satsifying a deductible.
Part D Coverage; Year to Year
Medicare Part D coverage changes often from year to year. This could include changes to the deductible level, formulary, and coverages. It is paramount to review Part D coverage from year to year in order to avoid unexpected coverage lapses.
What Level Deductible Client Are You?
Higher deductible plans typically have lower monthly premium payments, so folks that take very few drugs or inexpensive drugs would most likely benefit from a plan of this nature. Low deductible plans typically have higher premiums and would work best for those that take many drugs or expensive name-brand prescriptions.
Conclusion
To reiterate, it is very important for beneficiaries to review their drug coverage and PDP plan each year prior to the roll out of the proceeding year's plans. One plan may make sense for you this year and not work well for you next year, it all depends on the changes that ensue with your current plan. Get with your agent or reach out to a Poindexter representative during the Annual Enrollment period to confirm you are in the spot you need to be for the upcoming year.
