Part D Out-of-Pocket Costs Take Record Jump

Part D Out-of-Pocket Costs Take Record Jump

Medicare Part D prescription drug coverage hit a new milestone this year.  The highly — loathed “doughnut hole” or “coverage gap” closed this year.  But that doesn’t mean prescriptions will be free.  The co-insurance in the former Part D doughnut hole dropped to 25% of all drug costs.  That’s the good news.  But the out – of – pocket spending that’s required to qualify for catastrophic drug coverage took a big jump, from $5,100 in 2019, to $6,350 an increase of $1,250.  That’s the biggest jump in the out-of-pocket threshold since the start of Part D in 2006.

The costs don’t stop at $6,350.  Unlike other types of health insurance, there is no out-of-pocket annual maximum for beneficiaries enrolled in Part D.  After spending the $6,350 in drug costs, Part D plan enrollees pay the greater of 5% co-insurance or copays of $3.60 for generics and $8.95 for brand or non-preferred brand drugs.  For someone taking high cost specialty drugs, the 5% coinsurance could still be in the hundreds of dollars and, would continue for each refill until the end of the year.

Seventy-eight percent of participants in TSCL’s 2019 Senior Survey think Congress should establish an out-of-pocket spending cap.  In December of last year, prescription drug legislation, H.R.3, the Elijah Cummings Lower Drug Costs Now Act was passed by the House.  In addition to allowing Medicare to negotiate drug costs, the House bill would cap Part D’s annual out - of - pocket costs for prescription drugs, starting at $2,000 per year.

The Senate advanced its own bi-partisan prescription drug bill, that would establish a new out-of-pocket spending cap at about $3,100.  While the Senate Finance Committee advanced the package to the floor, it remains on hold.  Nevertheless, these bills continue to be among TSCL’s highest priorities for passage this year.