Medicare Part D What s new for 2018? Prepared by NSEA-Retired As a service for members www.nsea.org/retired Medicare Part D for 2018 1
Medicare Part D 2018 Deductible will be $405 Premiums change (amount depends on which plan you are enrolled in) Co-pays and donut hole payments go up. Coinsurance goes until $3,750 Catastrophic coverage begins when you have paid $5,000 out of your own pocket (includes deductible and any co-pays. Medicare Part D for 2018 2
What is the donut hole? Donut hole Initial coverage Catastrophic coverage Deductible You pay this Medicare pays this Medicare Part D for 2018 3
Medicare Part D 2018 Sign up for Part D when you sign up for Medicare (23 plans available premiums range from $20.40 to $100.60 per month) Change plans during open enrollment period, October 15 thru December 7, 2017 New plan year starts 1/1/2018 You can change Part D plans each year during the open enrollment period Medicare Part D for 2018 4
Health Reform Law closes donut hole by 2020 Starting in 2011 Part D enrollees got a 50% discount on the cost of brand-name drugs during the donut hole, paid for by pharmaceutical manufacturers 65% discount applies for 2018 (50% from drug company, 15% from Part D insurance plan) Co-insurance during the donut hole will be 25% by 2020 (phased in over time) Generic drugs will cost less, too (56% discount in 2018) Medicare Part D for 2018 5
Drug costs by 2020 Before Reform By 2020 5% paid by you 15% paid by plan, 80% paid by Medicare 5% paid by you 15% paid by plan, 80% paid by Medicare Catastrophic coverage begins Coverage gap 100% paid by you (minus $250 rebate) Donut hole Coverage gap 25% paid by you Brand name: 50% manufacturer discount, 25% paid by plan Generic 75% paid by plan Coverage limit 25% paid by you 75% paid by plan 25% paid by you 75% paid by plan Deductible 100% paid by you Deductible 100% paid by you 2010 2020 Medicare Part D for 2018 6
Cost sharing during donut hole Brand-name drugs Generic drugs You pay Plan pays Manufacturer pays You pay Plan pays 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 Medicare Part D for 2018 7
Deductible, 75/25 copay amounts for 2018 $4,000 $3750 $3,500 $3,000 $3700 $2,500 $2,000 $1,500 $1,000 $500 $0 25/75 copay for $3,300 $2,475 Drug plan $2,509 pays this 25/75 copay for $3,345 $825 You pay this $836 $400 Deductible $405 2017 2018 Medicare Part D for 2018 8
You pay more in the Donut Hole. During the donut hole you get a 50% drug-company discount and 15% from plan on name-brand meds; 56% discount on generics. $8,000 $7,000 Total out-of-pocket drug cost = $7,425 Total out-of-pocket drug cost = $7,508.75 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 Donut hole $3,725 $3,758.75 You pay 35% on name brands in 2018 $3,700 $3,750 Deductible and copay amounts 2017 2018 Medicare Part D for 2018 9
Medicare Part D 2018 The catastrophic limit (where you pay 5% of drug costs, and your Medicare Part D plan pays 95%) starts after your drug costs exceed $7,508.75 This copay amount would last for the rest of the plan year Your true out-of-pocket cost is $5,000 before the catastrophic coverage starts (deductible, co-insurance, and donut hole) Medicare Part D for 2018 10
Things to keep in mind Lowest premium cost is not necessarily the least expensive drug plan Plans differ on the deductible, the co-pay amounts, and the cost of the drugs Best way to compare plans is on the Medicare web site: www.medicare.gov Medicare Part D for 2018 11
Penalty premium for not signing up If you don t sign up for Medicare Part D when you are first eligible, a permanent premium surcharge penalty is applied when you do sign up (if coverage break is 63 days or more) Penalty is 1% of the national average Part D base premium for each month that you delay Avg. Premium in 2018 is $33.50, so penalty is $0.335 per month of delay, rounded to 10 For 12 mo. delay, 12% penalty is $4.02, rounded to $4.00 For 24 mo. delay, 24% penalty is $8.04, rounded to $8.00 For 36 mo. delay, 36% penalty is $12.06, rounded to $12.10 Penalty lasts for life! Medicare Part D for 2018 12
Ways to avoid the premium penalty for Part D Join a Medicare drug plan when you are first eligible Don t go 63 days or more in a row without a drug plan or other creditable coverage Creditable coverage is coverage: Through your employer as an active employee TRICARE or VA coverage, etc. Tell your drug plan about coverage you had that was creditable Medicare Part D for 2018 13
Need more information? 1-800-MEDICARE (1-800-633-4227) www.medicare.gov SHIP program 1-800-234-7119 VAS program 402-444-6617 BC/BS web site: www.bcbsne.com www.yourmedicaresolutions.com AARP web site: www.aarp.org Your neighbors! Medicare Part D for 2018 14