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

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)20152014201320122011
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 Subsidy20152014201320122011
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 Subsidy20152014201320122011
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

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