Medicare Part D Changes for 2020

There are important changes to beneficiaries’ Medicare Part D prescription drug coverage for 2020. These changes can affect how much patients must pay out of pocket for their medications, including certain cancer drugs.
Web Exclusives – January 15, 2020

Medicare prescription drug coverage is an optional benefit offered to everyone who has Medicare. There are 2 ways to get prescription drug coverage if you are eligible for Medicare. Many Medicare Advantage plans offer Medicare prescription drug coverage along with medical coverage and other benefits. However, some patients prefer to keep their original Medicare (which does not cover prescription drugs) and enroll in a Medicare Part D plan. Medicare Part D plans cover brand and generic prescription drugs.

The standard Medicare Part D benefit has changed for 2020, as shown below.

Figure 1

The Medicare Part D yearly deductible increases to $435 in 2020, up from $415 in 2019. Patients must pay 100% of the cost of their prescription drugs until the cap of $435 is reached.

After the yearly deductible is met, patients are responsible for 25% of brand-name drug costs until a total of $9,719 is spent. The other 75% is paid by health insurers and drug companies. The cap was increased substantially between 2019 and 2020, from $8,410 to $9,719. As a result, Medicare Part D enrollees are facing a relatively large increase in out-of-pocket drug costs before they qualify for catastrophic coverage in 2020.

After reaching the catastrophic phase of coverage, beneficiaries are responsible for 5% of the cost of prescription drugs for the remainder of the calendar year, with no out-of-pocket spending cap.

Of course, many Medicare beneficiaries will not reach the catastrophic phase of coverage. For those who do, however, patient out-of-pocket costs for brand-name drugs will increase by nearly $400 in 2020 compared with 2019.

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Last modified: January 15, 2020

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