Unless you are enrolled in a Medicare Advantage plan that offers prescription drug coverage, you will likely need some type of Part D plan. That is because Original Medicare does not cover prescription drugs. Now there are some limited exceptions which are covered by Part B.
Part D
Part D plans are strictly for prescription drugs. They are offered by private carriers but they are federally regulated. Every year the government sets the financial limits for the different stages of Part D. However plans can choose to offer lower deductibles and copays to entice beneficiaries. So let’s talk 2024.
Part D Deductible
The 2024 deductible is $545, up $40 from the $505 deductible in 2023. Of course, plans can choose to offer a lower deductible or even a $0 deductible. Usually plans with lower deductibles have higher monthly premiums. It’s not always the case, but usually there is an inverse relationship.
Prior to meeting the deductible you will have to pay the out of pocket costs for your prescriptions. However, lower-tier medications will almost always be covered prior to meeting your deductible. More on that in just a moment.
Initial Coverage to Coverage Gap
Once you’ve met your deductible, you enter into the initial coverage phase. At this point you will be responsible for a copay or coinsurance depending on the tier of the medication. As you continue to spend, medicare will keep track of your spending until you meet the limit for the initial coverage period and move into the coverage gap. In 2024, this limit is $5020. That’s up from $4660 in 2023.
During the coverage gap, your prices will increase until you reach the next limit. The out of pocket threshold in 2024 is 8000, up from $7400 in 2023. At that point your costs will significantly decrease.
Changes to Catastrophic Coverage
In 2024, once Part D enrollees without low-income subsidies (LIS) have drug spending high enough to qualify for catastrophic coverage, they will no longer be required to pay 5% of their drug costs, which in effect means that out-of-pocket spending for Part D enrollees will be capped.
Additionally, as of 2024, the out-of-pocket cost of insulin products is limited to no more than $35 per month in all Part D plans. In addition, adult vaccines covered under Part D, such as the shingles vaccine, are covered with no cost sharing.
Remember the AEP lasts from Oct. 15-Dec. 7 and there can be a late enrollment penalty, so don’t miss out on this window.
Jesse Smedley is the Principal Broker for iHealthBrokers and the founder, president, and CEO of Smedley Insurance Group, Inc. and iHealthBrokers.com. Since the inception of SIG in 2007, Jesse has been dedicated to helping people save money on their health insurance by providing them with resources to educate themselves on all their health insurance options, both under age 65 and Medicare beneficiaries. He is featured in many publications as well as writes regularly for expert columns regarding health insurance and Medicare.
