The Centers for Medicare and Medicaid services released 2022 premiums, deductibles, and other information for Medicare Part D prescription drug plans.
In this video, we’ll go through what that information is and what it means for you.
Confused about your Medicare coverage options? Watch our free video: How to Find the Best Medicare Coverage Without Paying More Than You Need To…
First, what is the information released by CMS?
It doesn’t tell you what your particular plan’s premium, deductibles, or any other costs will be. What CMS put out is the “Defined Standard Benefit” plan.
To be approved for sale to the public, all Part D coverage must be at least as good as the Defined Standard Benefit plan.
The Defined Standard Benefit plan is the lowest level of coverage that CMS will allow to be sold in any given year. Most plans provide more coverage than the Defined Standard Benefit plan.
For 2022, here are the cost-sharing amounts and the changes for each from 2021.
Average Monthly Premium: $33. In 2021, it was $31.47
Deductible: $480. In 2021, it was $445.
If your plan has a deductible, you pay all drug costs until you reach this amount.
Initial Coverage Limit: $4,430. In 2021, it was $4,130.
Once the deductible is met, the plan will pay a portion of your prescription costs and you may have copays or coinsurance amounts of up to 25% of the cost to fill each prescription.
The total cost of your prescriptions is tracked by the plan. The cost sharing remains at the Initial Coverage levels until total prescription costs meet the Initial Coverage Limit.
If your medication costs reach the Initial Coverage Limit during the calendar year, you will move into the Coverage Gap or Donut Hole phase of coverage.
This used to be a very stressful topic when discussing Part D plans.
Formerly, you would be responsible for all medication costs in the donut hole. That has changed.
Now, you continue paying a limit of up to 25% of the cost for your medications, just like the Initial Coverage, and the balance of the cost is shared between the Part D plan and the drug manufacturer.
Catastrophic Coverage: If your out-of-pocket costs reach $7,050, you will move to Catastrophic Coverage. In 2021, this occurred at $6,550.
If you reach Catastrophic Coverage, you will pay either 5% or a copay of $3.95 for generic medications and a $9.85 copay for brand name medications.
Your Part D plan covers all other costs for your prescriptions.
What does this mean for you?
This doesn’t tell you what your plan will cost with your medications, but it does give you a picture of the worst case scenario, since all plans have to be at least as good as the Defined Standard Benefit plan.
It’s worth a few minutes every year to see how cost sharing is changing in a big picture sense for Medicare Part D plans, but there’s no need to spend a lot of time with it.
Your time is better spent looking at the options available to you in your zip code for the new plan year. When you look at those plan options, it’s important to have your information, your medications and pharmacies, included rather than just looking at the plans’ cost sharing and design.
A Medicare Part D plan design is not useful until you know how much that plan will cost for your medications.
A Medicare plan broker can help you sift through all the information to figure out which plan is really the best one for you for the new year.
If you have questions about your Medicare Part D coverage, please feel free to call our office at 877-312-1414 or schedule a free, no obligation Medicare Plan Consultation. We’re here to help you understand your options and find the best Medicare coverage for you.
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