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Medicare Part D prescription drug coverage, often referred to as Part D, is provided and coordinated by Medicare-approved private insurance companies. Any beneficiary who is eligible for Original Medicare, Part A and/or Part B, and permanently resides in the service area of a Medicare Prescription Drug Plan, can sign-up for Medicare Part D.
Medicare Part D coverage is optional, but if you don’t enroll in Part D as soon as you’re eligible, you might pay a late-enrollment penalty if you enroll later.
In 2020, Medicare Part D members are facing a relatively large increase in out-of-pocket drug costs before they qualify for catastrophic coverage. This is due to the expiration of the Affordable Care Act provision that constrained the growth in out-of-pocket costs for Part D members by slowing the growth rate in the catastrophic threshold between 2014 and 2019. For 2020, the out-of-pocket spending threshold will increase by $1,250, from $5,100 to $6,350.
Part D members will also face higher out-of-pocket costs in 2020 for the deductible and in the initial coverage phase, as they have in prior years. The standard deductible is increasing from $415 in 2019 to $435 in 2020, while the initial coverage limit is increasing from $3,820 in 2019 to $4,020 in 2020. For costs in the coverage gap phase, beneficiaries will pay 25% for both brand-name and generic drugs, with plans paying the remaining 75% of generic drug costs—which means that, effective in 2020, the Part D coverage gap will be fully phased out. For total drug costs above the catastrophic threshold, Medicare pays 80%, plans pay 15%, and members pay either 5% of total drug costs or $3.60/$8.95 for each generic and brand-name drug, respectively.
Again, enrollment in Medicare Part D plans is voluntary, with the exception of seniors who are eligible for both Medicare and Medicaid and certain other low-income beneficiaries who are automatically enrolled in a prescription drug plan if they do not choose a plan on their own. Unless you have drug coverage from another source that is at least as good as standard Part D coverage also known as “creditable coverage”, you could face a penalty equal to 1% of the national average premium for each month you delay enrollment.
To learn more about how Part D works and what it covers including the 3 levels of assistance programs available to Nevada beneficiaries please go to What is Part D in Learn About Medicare.
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