Medicare Part D Plan Benefits 2014 – Standard
Medicare Part D plans 2014 must cover at least the Part D standard benefit or its actuarial equivalent.
- $310 deductible
- 25% of prescription drug costs between $310 and $2,970 = $665
- Part of the costs in the “Coverage Gap” (also known as the donut hole) – After total spending on drugs by the beneficiary and the plan reaches $2,850 ($2,970 in 2013) the beneficiary pays for 72% of generic drug costs and 47.5% of brand name brand drug costs (undiscounted).
→ Drug manufacturers provide a 50% discount on brand name drug costs.
→ In 2010 a new law was enacted that will eliminate the coverage gap by 2020. This will be done by reducing the amount beneficiaries pay while in the coverage gap by a small percentage each year until 2020 when they will be responsible for only 25% of brand and generic drug costs.
- Nominal costs under catastrophic coverage: Once the beneficiary expenditures (including drug manufacturer discounts) reach a total of $4,550 ($4,750 in 2013), the beneficiary is through the coverage gap and reaches catastrophic level coverage. On any future prescriptions the beneficiary pays either a co-pay of $2.55 for generic drugs or $6.35 for brand name drugs or a co-insurance of 5%, whichever is greater.
The Medicare Part D benefits must be at least as good as the standard coverage. Some Part D plans have enhanced coverage for an additional monthly premium. Some Part D plans will have no deductibles as well.