2014 Medicare Part D Costs: Changes in Premiums, Deductibles, and Coverage GapOctober 8th, 2013 | Posted by in Medicare Costs | Medicare Part D | Medicare Plans
With the Medicare Annual Election Period starting on October 15, beneficiaries should be aware of how 2014 Medicare Part D costs are changing and how this affects their coverage.
The Medicare Part D program was created in 2006 to provide eligible beneficiaries with access to prescription drug coverage. In order to get this coverage, beneficiaries could either enroll in a stand-alone Medicare Prescription Drug Plan (PDP) or in a Medicare Advantage Prescription Drug (MAPD) plan. Both types of Part D plans come with out-of-pocket costs, including premiums, deductibles, and copayments, and these costs vary each year. During the Medicare Annual Election Period, it is recommended that beneficiaries compare their 2014 Part D plan options to make sure that they are enrolled in the right coverage for their needs. However, before they start reevaluating their coverage, it is important to first understand how much 2014 Medicare Part D costs will be changing, and how this will impact how much beneficiaries pay for coverage in the coming year.
2014 Medicare Part D premiums
Premiums are costs that beneficiaries must pay for in full each month before the plan begins its coverage. When the Medicare prescription drug benefit was first introduced in 2006, beneficiaries paid an average of $25.93 for their monthly Part D plan premium. In 2014, Medicare Part D premium costs are expected to average around $31, as announced by the Department of Health and Human Services (HHS). This is a slight increase from the steady premium average of $30 for the past three years.
Additionally, individuals who make more than $85,000 a year and married couples filing jointly with incomes greater than $170,000 can expect to pay a higher portion of their Medicare Part D premium. Remember that the government currently pays a subsidy for every Part D plan to help keep monthly premium costs lower. Beneficiaries with higher incomes could be responsible for an additional $12.10 to $69.30 a month on top of their existing monthly Part D premium.
2014 Medicare Part D deductibles
Deductibles are costs that beneficiaries must pay each year before the plan begins its coverage. The government limits how much an insurance company may charge each year for its deductible amount, and not all plans may charge a deductible. In 2006, the annual Part D deductible was only $250; however, it has increased significantly since then. In the upcoming year, the Medicare Part D annual deductible limit is estimated to drop from the $325 in 2013 to $310 in 2014.
Part D donut hole costs and discounts in 2014
Some beneficiaries can still expect to fall into the Medicare “donut hole,” or coverage gap, in the coming year. In 2014, you will fall into the coverage gap after you and your Part D plan have paid $2,850 in prescription drug costs for the year. In the 2014 Medicare Part D donut hole, you will get a 28% discount on generic drugs and a 52.5% discount on brand-name drugs. Then, once you hit $4,550 in prescription drug costs for the year, you will have reached the catastrophic coverage limit, which means you will now only be responsible for a small copayment for coverage. In 2014, the minimum copayment in the catastrophic coverage period is $2.55 for a generic drug and $6.35 for all other drugs.
Other 2014 Medicare Part D costs
Beneficiaries are still responsible for sharing a portion of the costs of covered prescription drugs. This is either in the form of a copayment, which is usually a set amount that could depend on the type of drug, or a coinsurance, which is a percentage of the drug cost. Remember, your actual drug plan costs will vary depending on the following:
- Which medications you take and the quantity of these drugs
- Which Part D plan you choose to enroll in and the coverage rules related to this plan
- Whether you use pharmacies within your plan’s network
- Whether you take drugs on your plan’s formulary
- If you are eligible for the Extra Help program to help pay for Part D costs
Remember, 2014 Medicare Part D costs and plan options will vary from what was offered last year. During the Annual Election Period (AEP) from October 15 to December 7, you can make changes to your Part D coverage for 2014. It is during this time that you should compare all your 2014 plan options and make sure that you are still enrolled in the right coverage for your prescription drug needs and budget for the coming year. Our fast, free Medicare plan comparison tool can help you compare all Part D plans in your area and the details associated with these plans. Costs and benefits associated with 2014 Part D plans will be available for comparison after the start of the AEP on October 15.
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