How Will Medicare Part D Costs Change in 2020?
Summary: Changes in 2020 for Medicare Part D include:
- Increased IRMMA amounts
- A lower national base beneficiary premium
- Increased deductible
- Increased threshold to enter the donut hole
- Equal percentage payments for prescription and generic drugs in the donut hole
Do you know about changes coming to Medicare Part D 2020? Whether you take prescription medications now or are preparing for future needs, you need to know how plan changes might affect your coverage and your budget.
What is Medicare Part D?
Medicare Part D is a way for Medicare beneficiaries to get prescription drug coverage. Medicare-approved private insurance companies offer stand-alone plans and Medicare Advantage plans with prescription drug coverage, which can vary in costs and coverage.
Medicare Part D costs vary from plan to plan. Those costs might include:
Changes for Medicare Part D 2020: Monthly Premium
Your insurance company determines the amount of your monthly premium. If your income is over a certain amount, you may also pay an income-related monthly adjustment amount (IRMAA) in addition to your plan premium. This amount goes directly to Medicare. Adjustment amounts for 2020 are as follows:
|If you file an individual tax return and your income is:||If you file a joint tax return and your income is:||Your Part D IRMAA amount for 2020 will be:|
|$87,000 or lower||$174,000 or lower||No IRMAA amount due|
|$87,000 – $109,000||$174,000 – $218,000||Your IRMAA amount is $12.20 in addition to your plan premium|
|$109,000 – $136,000||$218,000 – $272,000||Your IRMAA amount is $31.50 in addition to your plan premium|
|$136,000 – $163,000||$272,000 – $326,000||Your IRMAA amount is $50.70 in addition to your plan premium|
|$163,000 – $500,000||$326,000 – $750,000||Your IRMAA amount is $70.00 in addition to your plan premium|
|$500,000 or higher||$750,000 or higher||Your IRMAA amount is $76.40 in addition to your plan premium|
Changes for Medicare Part D 2020: Late Enrollment Penalty
You might pay a late enrollment penalty in addition to your monthly premium. Medicare assesses this penalty to members who were without prescription drug coverage for 63 days or more after your Initial Enrollment Period is over. Coverage might include a Medicare Part D plan, a Medicare Advantage plan that includes prescription drug coverage, or creditable drug coverage from another source like an employer.
The penalty is calculated by multiplying the number of months you went without coverage by the “national base beneficiary premium.” Since the national base beneficiary premium can change each year, your penalty amount can change as well. The 2020 base beneficiary premium is $32.74. For example, if you went without coverage for 31 months, the penalty would be 31% (1% for each of the 31 months). 0.31 times $32.74 is $10.15 rounded to 10 cents is $10.20. $10.20 would be your late enrollment penalty in 2020 if you went without cover for 31 months.
Changes for Medicare Part D 2020: Copayments or Coinsurance
Copayments are a set amount you will pay for your medication, such as $15. Plans may have tiers or levels, with some medications costing more than others. Coinsurance is generally a percentage of the cost of the prescription drug. These Medicare Part D costs can also vary if your plan includes tiers for medications. Copayments and coinsurance may change from year to year. Make sure your medications will still be covered under your current plan.
Changes for Medicare Part D 2020: Yearly Deductible
The yearly deductible is the amount you will pay before Medicare starts covering their share of your costs. The amount can vary, and some plans may not have a deductible. Medicare limits the amount of the annual deductible for prescription drug plans. In 2020, that amount will not exceed $435 for the year.
Changes for Medicare Part D 2020: Coverage Gap
Medicare Part D plans may have a coverage gap or donut hole. This gap is a limit on what your plan might pay for your medications. In 2019, that limit is $3,820 and in 2020, the amount will increase to $4,020. Once you reach that limit, you will pay a percentage of the cost of your medication.
Read more about the closing coverage gap in 2020.
In 2019, Medicare members did not pay more than 25% of the cost of their brand-name medications during the coverage gap and no more than 37% of the cost of generic medications. In 2020, members pay no more than 25% for both brand-name and generic medications.
Finding the Right Medicare Part D Plan for You
The Fall Open Enrollment Period for Medicare beneficiaries is October 15 through December 7. This is the time when you can change your prescription drug plan based on changes that are coming to Medicare Part D 2020. If you want to change plans, our comparison tool can help. Enter your zip code below to find plans in your area.