Medicare Advantage 101: New policy series explains Medicare Advantage and its role within the Medicare system.
The Centers for Medicare & Medicaid Services (CMS) recently announced that the average basic premium for a Part D prescription drug plan is estimated to be $33.50 per month in 2018. This projected average premium is a slight decrease from the average monthly premium in 2017 ($34.70) and represents the continued relative stability of Part D premiums. It is important to note that while the average, basic premium is lower in 2018, beneficiary premiums will vary—some increasing and some decreasing next year.
Although Part D premiums remain stable, Part D costs continue to increase faster than other parts of Medicare. According to CMS, this increase is largely due to the high cost of specialty drugs, especially during the catastrophic coverage period. In all Medicare Part D plans, after the enrollee pays a certain amount in out-of-pocket costs (regardless of their total drug costs) for covered drugs, they will reach catastrophic coverage, when they pay a 5% coinsurance for their covered prescriptions.
For people with Medicare, they continue to see savings on their out-of-pocket drug costs due to the Affordable Care Act’s (ACA) closure of the Part D coverage gap, also known as the “donut hole.” Someone in the coverage gap in 2018 will pay 35% out of pocket for most of their brand name drugs and 44% out of pocket for generic drugs. The coverage gap is slowly closing, and will close completely by 2020 when people with Medicare will pay, on average 25% for their drugs after they have met their deductible.
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