(Remember, you usually pay 100% of your initial deductible before your Medicare Part D plan begins to provide coverage - but, see the exceptions below when a plan may exclude low-costing formulary Tiers from the deductible.)
As background, the standard CMS 2020 Medicare Part D plan includes a $435 initial deductible and although a Medicare plan's initial deductible can range from $0 to $435, most stand-alone 2020 Medicare Part D prescription drug plans (PDPs) will use the CMS standard Medicare Part D plan deductible ($435).
How many stand-alone 2020 Medicare Part D plans will have the $435 standard Initial Deductible?
Approximately 86% of all 2020 stand-alone Medicare Part D plans (815 of the 948 PDPs) will have an initial deductible -- ranging from $50 to $435. And, of all the 2020 PDPs having an initial deductible, 80% will have the standard deductible of $435 (654 of the 815 PDPs). **
As a state-specific example, of the 28 stand-alone 2020 Medicare Part D plans available in Ohio, 24 plans will have an initial deductible ranging from $100 to $435, and four (4) stand-alone Medicare Part D plans will have a $0 initial deductible. You can see our PDP-Facts.com/2020 for Medicare Part D premium information in your state.
The $0 initial deductible Medicare Part D plan losing favor over time.
Based on our analysis of the 2020 PDP landscape data, only 14% of all 2020 stand-alone Medicare Part D plans will offer a $0 initial deductible (as compared to 29% of the 2019 Medicare Part D plans - and looking way back, compared to 60% of 2007 PDPs that had a $0 deductible).**
Here is a chart showing the changes of Medicare Part D plan designs since 2007 with fewer Medicare Part D plans now offering a $0 initial deductible.
2020 Medicare Part D plans with some Formulary Drug Tiers excluded from the Initial Deductible
As was true in 2019, a number of stand-alone 2020 Medicare Part D plans having an initial
deductible will exclude some of their lower-costing formulary tiers from the initial deductible and provide
immediate coverage for these drugs, even though the initial deductible is not met.
For example, your Medicare Part D plan may have a $435 initial deductible, but your Tier 1 and Tier 2 generic formulary drugs are excluded from the deductible, meaning you do not need to pay the $435 before these lower-costing drugs receive coverage.
For example, the 2020 Humana Walmart Rx Plan has a $435 initial deductible with some of the generic formulary medications excluded from the deductible.
How does this work? This means that, if you were still within your $435 initial deductible and purchase a medication such as Atorvastatin Calcium (generic Lipitor®), you would not pay full retail price, but would instead be charged only a copayment for this generic medication (when purchased at one of the Medicare Part D plan’s preferred network pharmacy -- such as a Walmart pharmacy). And as always, if your Medicare Part D plan’s cost-sharing is more than your drug’s retail price, then you pay the lesser retail price (you never pay more than your negotiated retail price).
Reminder: Your Medicare plan costs and coverage can (and probably will) change each year.
If you are interested in changing your Medicare plan enrollment, the annual Open Enrollment Period (AEP) for Medicare Advantage plans and Medicare Part D drug plans begins on October 15 and continues through December 7, 2019.
Not sure where to begin?
If you or another Medicare beneficiary needs assistance understanding how your 2019 Medicare plan is changing or to learn more about your 2020 Medicare plan coverage options, please call 1-800-MEDICARE (1-800-633-4227) and speak with a Medicare representative.