Medicare Part D is a Medicare program that provides prescription drug coverage for seniors and people with disabilities. It is a voluntary program that is administered by private insurance companies, and there are several different plans available. One important aspect of Medicare Part D plans is the out-of-pocket maximum and cap, which can protect individuals from high prescription drug costs https://www.medicarepartdplans.org/. In this article, we will explain what the out-of-pocket maximum and cap are, how they work, and what changes are coming to Medicare Part D plans in 2024.
The out-of-pocket maximum is the most a plan member can pay for covered prescription drug costs in a year before the plan begins paying 100% of the costs. The out-of-pocket maximum does not include the monthly premium or the cost of drugs that are not covered by the plan. It can vary from plan to plan and can change from year to year. The cap on the other hand, limits how much plan members pay out-of-pocket for covered prescription drugs in one year. When plan members reach the cap, they only pay a small copayment or coinsurance for their medications.
Medicare Part D plans in 2024 will have a new out-of-pocket maximum and cap limit. According to the Centers for Medicare and Medicaid Services (CMS), the out-of-pocket maximum for standard Part D plans in 2024 is $7,050, which is an increase from $6,550 in 2022. The cap, on the other hand, will be $3,350 in 2024, an increase from $3,200 in 2022. It is essential to note that Medicare Advantage Prescription Drug (MA-PD) plans have different out-of-pocket maximums and caps, and these limits may also be changing in 2024.
To determine which Part D plan has the best out-of-pocket limits for you, you must compare plans on the Medicare plan finder website. Additionally, beneficiaries who receive Extra Help from Medicare to help pay for their Part D plan have lower out-of-pocket limits. For example, this year, beneficiaries who are eligible for the Extra Help program have an out-of-pocket maximum of $2,700, and a cap of $1.30 for generic drugs and $3.90 for brand-name drugs in 2022. The Extra Help program can be a good alternative for individuals who have high prescription drug costs but are struggling to pay for them.
In addition to the changes in out-of-pocket limits, CMS is also proposing some changes to the Medicare Part D Coverage Gap. Starting in 2023, brand-name drugs that are in the coverage gap will have a 75% discount instead of the current 70% discount. As a result, beneficiaries will pay only 25% of the cost of the brand-name drugs in the coverage gap instead of the current 30%. Furthermore, the out-of-pocket threshold, which is the amount of money that must be spent before entering the coverage gap, will increase from $4,430 in 2022 to $5,250 in 2023.
Understanding out-of-pocket maximums and caps on Medicare Part D plans is crucial for beneficiaries who want to avoid high prescription drug costs. With the new out-of-pocket limits and changes to the coverage gap coming in 2024, it is essential to take the time to compare different plans on the Medicare plan finder website to find the one that best suits your needs and budget. Additionally, beneficiaries who are eligible for the Extra Help program can take advantage of lower out-of-pocket limits and drug costs. Stay informed about the changes and make sure you are in the best possible plan to protect yourself from high prescription drug costs.