A Preview of the 2015 Medicare Part D Standard Drug Plan Coverage

Q1Medicare.com

Medicare Part D Prescription Drug Plan Newsletter

Q1Medicare.com

Q1Group LLC

Spring 2014

A Preview of the 2015 Medicare Part D Standard Drug Plan Coverage

Question:  Is there information already available on the 2015 Medicare Part D plans?

Yes.  The Centers for Medicare and Medicaid Services ( CMS ) has recently released their standard limits for basic Medicare Part D prescription drug plan coverage.  A chart comparing the CMS Medicare Part D defined standard benefit parameters from 2011 through 2015 is available at Q1Medicare.com/2015, and here are a few highlights of the changes to basic 2015 Medicare Part D plan coverage:

• The Donut Hole discount will increase for generic drugs:  Next year, if you reach the Donut Hole phase of your Medicare Part D plan coverage, the 2015 generic drug discount will increase from 28% to 35% and your 35% discounted drug cost will count toward meeting your 2015 total out-of-pocket maximum or Donut Hole exit point.  So if your generic medication has a retail cost of $100, you will pay $65, and the $65 will count toward your out-of-pocket spending limit.

• The Donut Hole discount will increase for brand-name drugs:  The 2015 brand-name drug discount will increase from 52.5% to 55% and you will receive credit for 95% of the retail drug cost toward meeting your 2015 total out-of-pocket maximum or Donut Hole exit point (the 45% you spend plus the 50% drug manufacturer discount).  So if you have a brand-name medication with a retail cost of $100, you will pay $45 for the medication, but get credit for $95 toward meeting your out-of-pocket spending limit.

• The standard initial deductible will increase: During the initial deductible, you are responsible for paying 100% of your drug costs before your Medicare Part D prescription drug plan coverage begins.  The 2015 initial deductible will increase $10 to $320 from the current 2014 value of $310 (these are the same changes we saw from 2011 to 2012).  This means that if you have an initial deductible in 2015, you will pay slightly more before your plan coverage begins.  However, some 2014 Medicare Part D plans currently exclude generic drugs from their deductible and we expect this practice to continue in 2015.  Please note that about half of the Medicare Part D plans offered in past few years have had an initial deductible.  Click here to see an overview of the 2014 Medicare prescription drug plan landscape.

• The initial coverage limit will increase: This is the negotiated retail dollar value of your prescription drug purchases used to determine when you enter into the 2015 Donut Hole or Coverage Gap phase of your Medicare Part D plan.  Medicare beneficiaries will enter the 2015 Donut Hole or Coverage Gap when the total negotiated retail cost of their prescription drug purchases reaches the initial coverage limit of $2,960, a $110 increase over the 2014 initial coverage limit of $2,850.  This means you will be able to buy slightly more medications before reaching the 2015 Donut Hole (assuming the retail cost of your medications does not change next year).

You can see how the retail value of your medications is changing over time by viewing our retail drug pricing history found at the bottom of the cost-sharing information for any of your covered Medicare Part D plan drugs – you can click here for an example of Atorvastatin 10mg found on the AARP MedicareRx Saver plan formulary in Florida).

• Total Out-of-Pocket Costs or TrOOP will increase:  TrOOP is the actual dollar figure you must spend to get out of the Donut Hole or Coverage Gap, excluding monthly premiums.  The 2015 TrOOP threshold will increase by $150 to $4,700 from the current 2014 value of $4,550 (again, the same as the change between 2011 and 2012).  As noted above, the brand-name medication purchases in the Donut Hole are discounted by 55%, but you will receive credit of 95% of the retail drug price toward meeting the 2015 TrOOP threshold.

• Our 2015 Donut Hole calculator shows how these changes will affect your 2015 drug spending budget.  To help you visualize how these 2015 plan changes may impact your prescription drug spending next year, we have launched our 2015 Q1Medicare.com PDP-Planner or Donut Hole calculator found at PDP-Planner.com/2015.  Our PDP-Planner allows you to enter your estimated retail prescription drug costs (based on your current spending) and preview what you can expect to pay throughout the different phases of your 2015 Medicare Part D plan coverage.  To get you started, you can click hereto see an example of the 2015 Medicare prescription drug plan phases for someone with $800 per month retail medication expense.  At the bottom of the chart, we provide different scenarios for generic and/or brand-name drug purchases.

Question:  Will all 2015 Medicare Part D prescription drug plans follow these new plan limits?

No.  The Medicare Part D defined standard benefit parameters are released each year by Medicare and set minimum limits for next year’s standard Medicare Part D prescription drug plan coverage.  However, Medicare Part D providers are allowed to deviate from the defined standard benefits when designing their 2015 plans and, with Medicare’s approval, offer Medicare Part D prescription drug plans with more enhanced features such as a $0 initial deductible or coverage in the Donut Hole.

Question:  When can we see the actual details of the 2015 Medicare Part D and Medicare Advantage plans?

October 1st.  The 2015 annual Open Enrollment Period will begin on October 15th and continues through December 7th.  However, the marketing period for 2015 Medicare plans will begin on October 1^st and actual Medicare Part D and Medicare Advantage plan details will become available at this time or a little earlier.  If you would like us to send you a notification when the 2015 Medicare Part D plan information becomes available, please click here to sign-up for our free email 2015 Reminder Service.  We will not share your email information with anyone.

Question:  Will Medicare plans that have a low quality star rating be discontinued in 2015?

Medicare Part D or Medicare Advantage plans that earned a quality star rating of lower than 3-stars for three years in a row will be terminated at the end of 2014.  We will learn which plans will be discontinued in late-September.

Do you have other questions about this 2015 information?  Click here and to let us know.