Medicare Part-D 2015: Donut Hole, Costs, Drug Plans, Deductible

The Medicare Modernization Act (MMA) requires to announce each year the Medicare Part D standard defined benefit and Retiree Drug Subsidy (RDS) amounts for the coming year.

Most Medicare Prescription Drug Plans have a coverage gap (also called the "donut hole"). This means there's a temporary limit on what the drug plan will cover for drugs.

Medicare Part-D 2015: Donut Hole, Costs, Drug Plans, Deductible

The Centers for Medicare & Medicaid Services (CMS) recently released information about the Medicare Part D stand-alone prescription drug plans (PDPs) that will be available in 2015.

Medicare Part D Benefit Parameters Comparison 2015

Medicare & Medicaid Services (CMS) on April 7, 2014, has announced the Medicare Part-D 2015 rates, deductible and out-of-pocket limit. Here are the Medicare Part-D Benefit Plan changes from 2014 to 2015. These are the Standard Benefit plan changes. This "Standard Benefit Plan" is the minimum allowable plan to be offered.

• Medicare Part-D Initial Deductible 2015: will be increased by $10 to $320 in 2015
• Medicare Part-D Initial Coverage Limit 2015: will increase from $2,850 in 2014 to $2,960 in 2015
• Medicare Part-D Initial Out-of-Pocket Threshold: will increase from $4,550 in 2014 to $4,700 in 2015
• Medicare Part-D Initial Donut Hole (Coverage Gap) 2015: begins once you reach your Medicare Part D plan’s initial coverage limit ($2,960 in 2015) and ends when you spend a total of $4,700 in 2015. In 2015, Part-D enrollees will receive a 55% discount on the total cost of their brand-name drugs purchased while in the donut hole. The 50% discount paid by the brand-name drug manufacturer will still apply to getting out of the donut hole, however the additional 5% paid by your Medicare Part D plan will not count toward your TrOOP. Enrollees will pay a maximum of 65% co-pay on generic drugs purchased while in the coverage gap.
• Minimum Cost-sharing in the Medicare Part-D Catastrophic Coverage Portion of the Benefit: will increase to greater of 5% or $2.65 for generic or preferred drug that is a multi-source drug and the greater of 5% or $6.60 for all other drugs in 2015
• Maximum Co-payments below the Out-of-Pocket Threshold for certain Low Income Full Subsidy Eligible Enrollees: will increase to $2.65 for generic or preferred drug that is a multi-source drug and $6.60 for all other drugs in 2015

For the defined standard Medicare Part-D plan, which will be higher than the 2014 amounts as shown in the Medicare Part D Benefit Parameters Comparison 2015 below:

Medicare Part-D Benefits	2015	2014	2013	2012	2011
Medicare Part-D Deductible After the Medicare Part-D Deductible is met, Beneficiary pays 25% of covered costs up to total prescription costs meeting the Initial Coverage Limit.	$320	$310	$325	$320	$310
Medicare Part-D Donut Hole Initial Coverage Limit: Medicare Part-D Coverage Gap (Donut Hole) begins at this point. The Beneficiary pays 100% of their prescription costs up to the Out-of-Pocket Threshold.	$2960	$2850	$2970	$2930	$2840
Total Covered Part D Drug Out-of-Pocket Spending including the Coverage Gap - Catastrophic Coverage starts after this point. (Please see note 1 below)	$6680.00 plus a 55% brand discount	$6455.00 plus a 52.50% brand discount	$6733.75 plus a 52.50% brand discount	$6657.50 plus a 50% brand discount	$6447.50 plus a 50% brand discount
Out-of-Pocket Threshold - This is the Total Out-of-Pocket Costs including the Donut Hole. 2015 Example: $320 (Deductible) +(($2960-$320)**25%) (Initial Coverage) +(($6680.00-$2960)*100%) (Cov. Gap) = $4700 (Maximum Out-Of-Pocket Cost prior to Catastrophic Coverage - excluding plan premium)	$4700 $320.00 $660.00 $3720.00 $4700.00	$4550 $310.00 $635.00 $3605.00 $4550.00	$4750 $325.00 $661.25 $3763.75 $4750.00	$4700 $320.00 $652.50 $3727.50 $4700.00	$4550 $310.00 $632.50 $3607.50 $4550.00
Total Estimated Covered Part D Drug Out-of-Pocket Spending, including the Coverage Gap Discount (NON-LIS). See note 2 below.	$7061.76	$6690.77	$6954.52	$6730.39	$6483.72
Medicare Part D Catastrophic Coverage Benefits
Generic/Preferred Multi-Source Drug	$2.65	$2.55	$2.65	$2.60	$2.50
Other Drugs	$6.60	$6.35	$6.60	$6.50	$6.30
Full Benefit Dual Eligible (FBDE)	2015	2014	2013	2012	2011
Deductible	$0.00	$0.00	$0.00	$0.00	$0.00
Copayments for Institutionalized Beneficiaries	$0.00	$0.00	$0.00	$0.00	$0.00
Maximum Copay for Non-Institutionalized Beneficiaries
Up to or at 100% FPL:
Up to Out-of-Pocket Threshold
Generic/Preferred Multi-Source Drug	$1.20	$1.20	$1.15	$1.10	$1.10
Other	$3.60	$3.60	$3.50	$3.30	$3.30
Above Out-of-Pocket Threshold	$0.00	$0.00	$0.00	$0.00	$0.00
Over 100% FPL:
Up to Out-of-Pocket Threshold
Generic/Preferred Multi-Source Drug	$2.65	$2.55	$2.65	$2.60	$2.50
Other	$6.60	$6.35	$6.60	$6.50	$6.30
Above Out-of-Pocket Threshold	$0.00	$0.00	$0.00	$0.00	$0.00
Part-D Non FBDE Full Subsidy	2015	2014	2013	2012	2011
Eligible for QMB/SLMB/QI, SSI or applied and income at or below 135% FPL and resources < $7160 (individuals) or < $10750 (couples)
Deductible	$0.00	$0.00	$0.00	$0.00	$0.00
Maximum Copayments up to Out-of-Pocket Threshold
Generic/Preferred Multi-Source Drug	$2.60	$2.55	$2.65	$2.60	$2.50
Other	$6.60	$6.35	$6.60	$6.50	$6.30
Maximum Copay above Out-of-Pocket Threshold	$0.00	$0.00	$0.00	$0.00	$0.00
Medicare Part-D Partial Subsidy	2015	2014	2013	2012	2011
Applied and income below 150% FPL and resources between $7161-$13440 (individuals) or $10751-$26860 (couples) (category code 4)
Deductible	$66.00	$63.00	$66.00	$65.00	$63.00
Coinsurance up to Out-of-Pocket Threshold	15%	15%	15%	15%	15%
Maximum Copayments above Out-of-Pocket Threshold
Generic/Preferred Multi-Source Drug	$2.65	$2.55	$2.65	$2.60	$2.50
Other	$6.60	$6.35	$6.60	$6.50	$6.30

1. Total Covered Part D Spending at Out-of-Pocket Threshold for Non-Applicable Beneficiaries - Beneficiaries who ARE entitled to an income-related subsidy under section 1860D-14(a) (LIS)
   
   
2. Total Covered Part D Spending at Out-of-Pocket Threshold for Applicable Beneficiaries - Beneficiaries who are NOT entitled to an income-related subsidy under section 1860D-14(a) (NON-LIS) and do receive the coverage gap discount. For 2015, the weighted gap coinsurance factor is 90.693%. This is based on the 2013 PDEs (85.9% Brands & 14.1% Generics)
   
   
3. The Catastrophic Coverage is the greater of 5% or the values shown in the chart above. In 2014, beneficiaries would be charged $2.60 for those generic or preferred multisource drugs with a retail price under $52 and 5% for those with a retail price greater than $52. As to Brand drugs, beneficiaries would pay $6.60 for those drugs with a retail price under $132 and 5% for those with a retail price over $132.
   
   
4. The actual amount of resources allowable may be updated for contract year 2015