Lately at the pharmacy counter, I have been talking about Medicare Part D open enrollment for 2020. Open enrollment occurs every year and gives Medicare Part D prescription drug plan enrollees a chance to compare their current plan to other options.
Medicare Part D plans follow a basic design that is prescribed by Medicare law, including the Affordable Care Act. However, the available plans are administered by private insurance companies that are able to design different plan options within the legislated framework. This flexibility provides lots of choices for enrollees and lots of confusion.
For 2020, the good news is the “donut hole” or “coverage gap” is finally gone for generic drugs (it ended in 2019 for brand drugs, could you tell?). In the coverage gap, copays for generic and brand drugs will be capped at 25%. That means for a prescription with a total cost of $100, whether brand or generic, the copay will be no more than $25.
The bad news is the catastrophic limit has increased from $5,100 to $6,350. That is almost a 25% increase. Patients with the highest level of spending may be impacted the most due to this change in catastrophic limit. Copays in catastrophic go down to a maximum 5%. Brand-name drugs get manufacture discounts of up to 75%, which get credited toward a patient’s out-of-pocket expenses. Therefore, a patient with a high level of spending that approaches the catastrophic level may actually reduce his or her out-of-pocket expenses by using more expensive brand-name medicine.
In most cases, generic medicine is the most cost-effective option, and it is therapeutically similar. It is important to evaluate your plan because the right choice is dependent on your specific medication profile. Often times, it makes financial sense for spouses to be on different plans due to different medication profiles. It may not make sense for your household, though.
Medicare plans can be compared on Medicare’s website using their plan finder tool. Your local community pharmacist can also provide you with a custom report using the Medicare data.