2020 Prescription Drug Plans
Since 2016 the Standard Medicare Prescription Drug Plan has changed a lot. The Deductible has gone up from $360 to $435 in 2020. Likewise, the Initial Coverage Limit has changed from $3310 to $4020 and the Out-of-Pocket limit (Coverage Gap) or TrOOP (True Out-of-Pocket) has risen from $4850 to $6350 in 2020 before you reach the Catastrophic Coverage where your cost for drugs drop. You can read below for information and changes to 2020 prescription drug plans.
Phase 1. Deductible
Most PCP (Prescription Drug Plans) have a deductible ($435 maximum in 2020) that needs to be satisfied before you will start receiving Plan benefits. Some plans do not have a Deductible while others waive the Deductible for Tier 1 and Tier 2 drugs (Generic drugs usually).
Phase 2. Initial Coverage
After the Deductible, you will enter the Initial Coverage Phase where Cost Sharing begins. Cost Sharing is where you and the insurance company share the cost for the drugs. During this phase, you will pay 25%. You remain in this phase until $4020 in total drug costs is reached for the year. Total drug costs are the total amounts that you and the insurance company will spend together on drugs (Cost Sharing).
Phase 3. Out-of-Pocket/Coverage Gap (True Out-of-Pocket)
Once you and the insurance company spend $4020 in the Initial Coverage Phase you will enter the Out-of-Pocket or Coverage Gap Phase. You remain there and continue paying 25% until you have spent a total of $6350 Out-of-(Your)-Pocket for the year.
Phase 4. Catastrophic
Once your spending reaches $6350, you enter the Catastrophic Phase. Your costs will then drop to an average cost of about 5%. You remain in this phase until the end of the year.
On January 1, 2021, everything resets.
You then start all over again with new numbers that I don’t know yet.
Remember, when you own a PDP you can change plans during Open Enrollment every year. The Open Enrollment Period for PDPs begins October 15th and ends December 7th each year. Be certain to re-analyze your plan every year. You want a plan that covers your needs at the lowest price.
Please give our office a call if you are interested in a Medicare Supplement Reno or Medicare Advantage Reno plan. As your health insurance broker, we can shop all options to find the best fit for you.