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.
Stage 1:
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.
Stage 2:
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.
Stage 3:
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.
Stage 4:
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.
Stage 5:
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.
