Drug Plan Cost – 2022 Medicare Benefit Design
Confused by your prescription cost after a pharmacy visit? Medicare Part D benefits are not simple. In fact, drug plans are all built on a standard design that is set by Medicare as a minimum requirement. Every drug plan has four phases in which out-of-pocket costs are assessed.
The first phase is the Deductible. The standard deductible for 2022 is $480. The Member pays 100% of the costs of their drugs until the plans set deductible is met. Some plans have no deductible, but the highest the deductible can be is $480.
The second phase is the Initial Coverage Phase. In this phase, the member pays a portion of drug cost until the total of what the plan and member pays is equal to $4,430 in total retail value of the drugs. The plan generally provides coverage around 75% of the drug cost, and you are generally paying co-pays on your drugs.
The third phase is called the Coverage Gap. The Coverage Gap is often referred to as the donut hole. The member pays approximately 25% on generic and name brand drugs until what they have paid in True Out of Pocket (TrOOP) amounts to a total of $7,050. Which is calculated off the total cost of the drug.
The fourth phase is considered Catastrophic Coverage. If a member hits the $7,050 threshold, the plan comes back in and pays a portion of the member’s drug costs leaving them paying 5% or a small copayment until the end of the year.
At the break of the new year, the cycle resets. Look for the new standards set by Medicare for 2023!
No one should be expected to remember and understand the Part D standard design on their own. As questions come up regarding prescription drug cost, lean on a local Medicare agent to serve as your Medicare insurance guide. VibrantUSA is here year-round to support customer service needs, give us a call at 866-733-5111.