Medicare Part D Benefits Overview for 2020
How much does Medicare Part D cost in 2020?
You’re likely to see a wide range of costs across Medicare health and prescription drug plans. Let’s review some of the costs commonly associated with Medicare Part D in 2020.
Generally, two types of plans can provide Medicare prescription drug coverage: stand-alone Medicare Part D Prescription Drug Plans, and Medicare Advantage Prescription Drug plans.
Medicare Part D in 2020: monthly premium
As in prior years, premiums vary from plan to plan in Medicare Part D 2020. Here are some things that may affect how much Medicare Part D costs you in premium-related expenses:
- Medicare applies a surcharge on top of the plan’s premium to those with high incomes. Medicare considers your income from tax returns two years ago. So, for Medicare Part D in 2020, a surcharge may apply if your 2018 income was more than $87,000 (for individual tax filers) or $174,000 (for joint tax filers).
- A government program called Extra Help may help with the costs of Medicare Part D coverage by paying at least a portion of Medicare Part D 2020 related costs– such as premiums, deductibles, and coinsurance. Extra Help is generally for those whose income and/or resources fall below a certain threshold.
- A Medicare Part D late enrollment penalty typically applies to those who do not enroll in a Medicare plan providing Part D coverage when they are first eligible for one, and go without creditable prescription drug coverage for at least 63 continuous days after their Initial Enrollment Period is over.
Medicare Part D in 2020: annual deductible
When figuring out how much Medicare Part D in 2020 will cost you, you’ll need to know if your plan has an annual deductible.
A deductible is an amount you may have to pay in one year before your plan pays its share for covered services. Many Medicare prescription drug plans have annual deductibles. In 2020, a Medicare prescription drug plan cannot charge a deductible that is more than $435 per year. You may find some plans that have lower deductibles—some, perhaps, as low as $0.
Medicare Part D in 2020: copayments and coinsurance
Most Medicare prescription drug plans require you to pay a copayment or coinsurance for covered prescription drugs (after you have paid your deductible, if applicable). How much you pay varies from plan to plan for Medicare Part D in 2020, as in prior years.
It’s common for Medicare prescription drug plans to categorize prescription drugs into benefit tiers with different copayment and coinsurance amounts. Your Medicare Part D cost is usually higher for the most expensive brand-name medications than generic medications in lower tiers.
Medicare Part D in 2020: formularies
How much you pay for prescription drugs under Medicare Part D in 2020 depends partly on whether your medications are in your plan’s formulary. A formulary is a list of prescription drugs covered by the Medicare plan. Formularies may differ from plan to plan because the plans negotiate individually with prescription drug manufacturers to help reduce how much Medicare Part D coverage costs you. Formularies may change at any time, and the plan will notify you of changes if necessary.
How much your medications will cost under Part D also depends on which benefit tier your medications are on in the plan’s formulary.
All Medicare prescription drug plans must include at least two medications from every therapeutic class. They must include in their formularies nearly every prescription medication that may be used in the treatment of certain health conditions. These “protected classes” include medications for HIV/AIDS treatment, anti-cancer medications, medications for the treatment of depression and psychosis, and anticonvulsive and immunosuppressant medications.
You pay the total cost of prescription drugs that are not on the plan’s formulary unless the plan grants an exception. You also pay the total cost of medications that are excluded under the Medicare Part D program, such as over-the-counter medications, weight loss/gain agents, products to treat hair loss, and mineral supplements.
If you want to learn more about some of the Medicare plans where you live, use the Browse Plans button on this page.