Here’s an overview of CMS’ Standard Benefit Plan changes for the Part D program for 2017. The Standard Benefit Plan is the minimum allowable Medicare Part D plan that can be offered.
- Annual Deductible: will be increased by $40 to $400 in 2017.
- Initial Coverage Limit (ICL): will increase from $3,310 in 2016 to $3,700 in 2017.
- Out-of-Pocket Threshold: will increase from $4,850 in 2016 to $4,950 in 2017.
- Coverage Gap (donut hole): starts when you reach the ICL ($3,700) and stop when you spend a total of $4,950.
- Gap Brand Name Discount: there is a 60% discount on the total cost of brand-name drugs purchased while in the donut hole. The 50% discount paid by the brand-name drug manufacturer will apply to getting out of the donut hole, however the additional 10% paid by your Medicare Part D plan will not count toward your TrOOP (True Out-of-Pocket costs).
Gap Generic Discount: there is a 51% co-pay on all generic drugs purchased while in the coverage gap (a 49% discount).
- Maximum Co-payments below the Out-of-Pocket Threshold for Low Income Full Subsidy Eligible Enrollees: will increase to $3.30 for generic or preferred drug that is a multi-source drug and $8.25 for all other drugs.
- Minimum Cost-sharing in the Catastrophic Coverage Portion of the Benefit: will increase to greater of 5% or $3.30 for generic or preferred drug that is a multi-source drug and the greater of 5% or $8.25 for all other drugs.
Donut Hole Drug Cost Explanation
There is a 60 percent discount on the total cost of brand-name drugs purchased while you’re in the coverage gap. The brand-name drug manufacturer offers a 50 percent discount, which applies to getting out of the donut hole. However, 10 percent paid by your Medicare Part D plan does not count toward your TrOOP. For example, if you’re in the coverage gap and buy a brand-name medication with a retail cost of $100, you’ll pay $40 for the medication, and receive a $90 credit on your 2017 out-of-pocket spending limit.
On generic drugs you buy in the gap you pay a 51% co-payment. For instance, if your generic medication has a retail cost of $100, you’ll pay $51. This amount counts toward your TrOOP.
Medicare Part D Defined Standard Benefits 2013 to 2017
|Initial Coverage Limit||$3,700||$3,310||$2,960||$2,850||$2,970|
|Total Covered Part D Drug Out-of-Pocket Spending including the Coverage Gap||$7,425||$7,062||$6,680||$6,455||$6,733|
|Estimated Out-of-Pocket Spending including the Coverage Gap Discount||$8,071||$7,515||$7,061||$6,690||$6,954|
|Catastrophic Coverage Benefit:|
|Brand Name/Preferred Discount||60%||55%||55%||52.50%||52.50%|