Your costs will depend on the plan you choose, and your out-of-pocket costs will differ considerably from plan to plan. For this reason, the Centers for Medicare and Medicaid Services (CMS) is encouraging beneficiaries who currently have plans to reconsider their choice, and all beneficiaries are urged to make careful comparisons. It is very important to go beyond a comparison of the premiums and deductibles that apply to each plan. You should also look at the copayments that will be required each time you fill a prescription and whether the drugs you take now will be covered by the plan. In addition, it is important to check if your plan has prior authorization, quantity limit or step therapy rules that limit access to covered drugs.
In 2020, due to the expiration of the Affordable Care Act provision that limited growth in out-of-pocket costs, Medicare Part D enrollees are facing a relatively large increase in out-of-pocket drug costs before they qualify for catastrophic coverage. In 2020 and beyond, the threshold will revert to the level that it would have been using the growth rate calculation before the Affordable Care Act became law. For 2020, the out-of-pocket spending threshold will increase by $1,250, from $5,100 to $6,350.
It is useful to do comparison shopping during every annual open enrollment period. In 2020, the base beneficiary premium for Part D plans will decrease slightly to $32.74 from $33.19 in 2019. Plans will change their formularies and the copayments they charge for drugs. Therefore, it is important that you closely examine the letter from your plan that details how your coverage will change. CMS requires plans to send this letter by September 30.
A few points to remember as you consider your out-of-pocket costs
- Only qualified drug expenses will count toward out-of-pocket expenses. If you use prescriptions not covered by the plan you sign up for, import drugs from Canada or receive coverage from a drug company’s patient assistance program — none of those expenses will count toward any of the limits;
- All dollar amounts are annual, so CMS will begin counting from zero each year;
- Premiums and copayments will change from year to year, and will vary from plan to plan;
- If your income is limited, you may be eligible for Extra Help to pay these costs;
- Higher-income Part D beneficiaries, those with incomes greater than $85,000/ individual and $170,000/couple, will pay a higher premium. Premiums increase on a sliding scale basis depending on income. The increased amount results from lower Medicare subsidy support for the premiums of high-income earners.