Medicare prescription drug plans can change every year, whether it’s the medications on your formulary or the way the plan is designed. While you may not always see a significant change in Medicare rates, here’s what to know about prescription drug costs in 2021.
Medicare Part D Prescription Drug Deductible
The Medicare Part D prescription drug deductible increased from $435 in 2020 to $445 for 2021.1 Some plans can have much lower deductibles or even no deductible at all, but this number means no prescription drug coverage plan can have a deductible that exceeds $445.
The Medicare Part D prescription coverage gap, also known as the “donut hole,” was slowly eliminated over the last 10 years, closing for brand-name drugs in 2019 and generic drugs in 2020. Although the donut hole has technically closed, it is still relevant to the way prescription Medicare costs are covered and how they count toward out-of-pocket totals and reaching the catastrophic coverage limit.
If applicable, after meeting the deductible, Medicare beneficiaries enter the Initial Coverage Stage and pay their copays or coinsurance until you reach the donut hole—for 2021, this means once you and your health plan have spent $4,130 on your medications. This is an increase of $110 compared to 2020.
Since the donut hole has closed, Medicare beneficiaries pay 25% of the cost of prescription drugs regardless of brand or generic while in the donut hole. However, it’s dependent on your Medicare Part D plan’s design, so if your plan is designed with a copay (instead of coinsurance), after the deductible and before the donut hole, your costs will change once you reach the donut hole.2
Changes in Standard Sharing Structure for Medicare Cost 2021
As a result of changes to Medicare’s standard cost-sharing structure (how much enrollees pay out of pocket), there will be prescription drug plans with higher deductibles, higher initial coverage limits and higher out-of-pocket cost thresholds. At SelectQuote, we can help you ensure you’re getting the most out of the benefits available to you, including the right Medicare plan coverage for your prescriptions.
New Medicare Prescription Drug Plans 2021
For 2021, Medicare is offering enhanced alternative prescription drug plan options that include lower out-of-pocket costs for insulin. The cap for a month’s supply of insulin on these plans is typically $35. Each Medicare enrollee should have at least nine insulin savings plans available to them.3
Worried about your prescription drug costs? SelectQuote can help.
While you may have seen big price increases for prescription drug coverage in years past, you shouldn’t see a huge increase in 2021. If you have seen an increase in prescription drug costs or have questions, our licensed insurance agents can help you determine what’s changed in your coverage and connect you to the appropriate resources.
1 https://www.medicare.gov/drug-coverage-part-d/costs-for-medicare-drug-coverage/yearly-deductible-for-drug-plans#:~:text=This%20is%20the%20amount%20you, don’t%20have%20a%20deductible