We see frequent changes in health insurance plans every year, especially Medicare Part D coverage. Every year, Medicare adjusts the list of prescription drugs, healthcare products, and services they will pay. This revised list is released several months in advance to give Medicare Part D recipients, health care providers, and caregivers time to adjust.
We now know what drugs are covered by Medicare Part D and what medications will not be covered in the coming months for 2022. In this article, we will discuss some of the most significant changes that you should know about.
Highlights from the Medicare Part D Drug List for 2022
The Centers for Medicare and Medicaid Services, also known as CMS, released the new details for the changes, which will take place in 2022 on April 2, 2021. These details include information on new deductible amounts and coverage limits, brand-name and generic prescription drug discounts, increased out-of-pocket costs, and how these changes for 2022 will affect the Medicare coverage gap.
New Medicare Part D Deductible Amounts and Coverage Limits
The President signed the Bipartisan Budget Act of 2018 in February 2018. This change will affect everyone covered by Medicare Part D. While some of these changes will provide money-saving discounts for some recipients, others will see a rise in their out-of-pocket costs.
There will be a slight increase in the standard initial deductible, the 2021 standard initial deductible set by CMS is $445. In 2022, it will increase to $480. This amount has been on a steady rise since 2015, when it was at $320. This deductible is the amount an individual pays before their Medicare Part D coverage begins.
Medicare Part D recipients will also see an increase in their initial coverage limit. The initial coverage limit for Part D is $4,130 in 2021. In 2022, the initial coverage limit will be $4,430.
The Cost of Generic Drugs for Medicare Recipients in 2022
For Medicare Part D plan members who take generic prescription drugs, the cost of your medication will be less once you reach the donut hole. In 2018, the generic drug discount for Medicare recipients was at 56%.
This discount went up to 63% in 2019. This discount applies to any generic prescription. All out-of-pocket costs that you pay out apply to your out-of-pocket spending limit for the year. Once you reach that limit, you will leave the donut hole.
Discounts for Brand-Name Prescription Drugs in 2022
Along with receiving a money-saving discount on generic drug purchases, Medicare Part D recipients will also get a discount on any brand-name drugs that they are on. In addition, the coverage gap discount is set to increase to 75% off brand-name medication.
With this increase, you will only be required to pay 25% of the cost for brand-name prescriptions. Moreover, although you will only pay for a quarter of the prescription cost, 95 percent of the price of all brand-name drugs you take will be applied to your out-of-pocket spending limit for the year.
Brand-name medication purchases in the 2022 Donut Hole are discounted by 75% (you pay 25%), but you will receive credit of 95% of the retail drug price toward meeting the 2022 Total Out-of-Pocket Cost threshold.
Shifting the Cost of Medication to the Drug Companies in 2022
Starting on January 1, 2020, the Donut Hole was closed completely.
The Donut Hole, which has been around since Medicare Part D began back in 2006, was initially created to keep down the overall out-of-pocket costs for Medicare recipients and the federal government.
But for those on Medicare who rely on brand-name prescriptions, it has been more of a disadvantage than a benefit. Beneficiaries were forced to choose between paying for expensive medication that worked well or paying less for medication that wasn’t as useful for treating their health condition.
Many Medicare Part D Beneficiaries Can Look Forward to Saving Money on Prescriptions in 2022
As with every new year, the changes in Medicare Part D will benefit some and be a disadvantage for others. However, these new changes are expected to provide those who depend on expensive brand-name medication with a significant discount on their out-of-pocket expenses.