2024 has some changes coming to the way that prescription drug plans work and keep in mind that all Prescription Part D Plans have the same Stages of Coverage and what makes each plan different is the following:
- Deductible amounts: i.e., $0, $250, $545.
- Copay or co-insurance amounts: i.e., $0 Copay, $45 Copay, 25% co-insurance, 33% co-insurance.
- Formulary lists – One carrier may have one medication categorized as a Tier 1 medication and another carrier may have it as a Tier 2 medication. Another situation is that one plan may have a prescription on the Formulary list and another plan may not.
What are the Stages of Coverage and how do they work for 2024?
- In the deductible phase, Part D enrollees pay 100% of their drug costs, up to $545 in 2024. Not all Part D plans charge a deductible.
- In the initial coverage phase, Part D enrollees pay 25% of total drug costs and Part D plans pay 75%, up to total drug costs of $5,030 in 2024. However, most Part D plans charge a mix of copayments and coinsurance in this phase rather than a standard 25% coinsurance rate.
- In the coverage gap phase, Part D enrollees pay 25% of total drug costs for both brand-name and generic drugs. Part D plans pay the remaining 75% of drug costs.
- In the catastrophic phase, 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. In 2024, the catastrophic threshold will be set at $8,000. This amount includes what Part D enrollees spend out of pocket plus the value of the manufacturer price discount on brands in the coverage gap phase. At this amount, Part D enrollees who take only brand-name drugs in 2024 will have spent about $3,300 out of their own pockets and will then face no additional costs for their medications.
