Your Medicare Part D plan's Initial Deductible affects your prescription drug costs in that you are responsible for 100% of your drug costs until you meet your plan's Initial Deductible. After your deductible is met, you enter the Initial Coverage phase and you share the cost of your prescription drugs by paying either a co-payment (for example, $10 for a $30 drug) or co-insurance (25% of the $30 retail price) for your medications.
Some popular Medicare Part D plans exclude one or more of the generic drug tiers from the deductible. If you are enrolled in such a plan, your brand-name drug purchases would fall into the deductible but your generic drug purchases would skip the deductible and fall into the Initial Coverage phase cost-sharing. For
example, your Humana
plan does not have a deductible for your Tier 1 and Tier 2 drugs,
but if you purchase a more expensive Tier 3 drug after only using lower-costing
drugs, you may find that you are still in the $400 deductible
There are a few different ways that your deductible might have changed for the new 2017 plan year and these changes can mean that you pay full retail prices for your medications during the early months of your new 2017 coverage:
- If your Medicare Part D plan follows the CMS standard plan model, your prescription drug plan had a $360 Initial Deductible in 2016 and now has a $400 Initial Deductible in 2017. This means that you will pay an additional $40 in 2017 before you leave the Initial Deductible phase of coverage and move into the Initial Coverage phase. Twenty-six (26) stand-alone 2016 Medicare prescription drug plans (PDP) used the standard deductible and these same drug plans continue to use the standard deductible in 2017. There are approximately 8,000,000 Medicare beneficiaries enrolled in these plans that have a $400 deductible.
- Your Medicare Part D plan added an Initial Deductible. For example, the 2016 SilverScript Choice plan in Hawaii was the only stand-alone Medicare Part D plan that had a $0 and now this plan has an Initial Deductible of $400. So, plan members in this plan (9,100 members in Hawaii) will be paying full retail costs for their prescriptions in early 2017 while they are in their Initial Deductible phase of coverage. As a reminder, the Initial Coverage Phase cost-sharing will start after the plan members meet their plan's $400 Initial Deductible.
- Your non-standard Initial Deductible Medicare Part D plan has increased its Initial Deductible for 2017. Approximately 47,000 Medicare beneficiaries are enrolled in plans that had an increase in their Initial Deductible, beyond the $40 standard increase. Members in these plans will need to pay more for their medications before entering their Initial Coverage phase. See examples in the chart below:
2017 Medicare Prescription Drug Plan
2017 Plan Name
|AR Blue Cross - Medi-Pak Rx Basic (PDP)
|Blue Medicare Rx Standard (PDP)
|Symphonix PrimeSaver Rx (PDP) switch to the AARP MedicareRx Walgreens (PDP)
- You switched to a 2017 Medicare Part D plan that has a higher deductible than your 2016 plan. Whether you switch from a $0 deductible plan or from a plan with a lower deductible than your new plan, you will have to pay more the full retail cost for your medications until your deductible is met. As mentioned above, you will not enter the cost-sharing portion of your drug plancoverage until you have met your new plan's Initial Deductible.
- Your Medicare plan excludes Tier 1 generics from the deductible, however, your generic medication was moved from Tier 1 to Tier 2 non-preferred generics for 2017 and now falls into the deductible.
- In a similar scenario, your 2016 generic medication was excluded from the deductible, however you have switched to the brand-name equivalent drug in 2017 (found on a higher formulary tier) and this drug tier is not excluded from your plan's initial deductible.
In all of the examples above, you can expect to pay more (full retail cost) for your medications during the early months of 2017 until you meet your Medicare Part D prescription drug plan's Initial Deductible and then move into the Initial Coverage phase during which you share your prescription drug costs with your plan by paying a co-pay or co-insurance.