Are you ready for Medicare Part D in 2021? Part D is the branch of Medicare that covers prescription drugs. Beneficiaries can either purchase Part D as a stand-alone plan or as part of a Medicare Advantage plan that includes prescription drug coverage. Each Part D plan has its own formulary, or list of covered drugs.
As you prepare for your Medicare coverage next year, you’ll need to know the costs of Medicare Part D in 2021. Here’s all the info you need to know.
Part D deductible
The Medicare Part D deductible in 2021 is $445. This is a $10 increase from the $435 deductible in 2020.
After you meet your deductible, you’ll enter the initial coverage period. In this period, you pay copays on each drug you are prescribed based on which Tier it’s in. You’ll pay copays up until the initial coverage limit, which is $4,130 for 2021. The money that goes toward the initial coverage limit is made up of the copays you pay and what the insurance company pays for your drugs.
Part D coverage gap
Once you reach the $4,130 initial coverage limit, you’ll be in the coverage gap, or donut hole. While in the gap, you’ll pay 25% of the cost of your brand-name prescriptions and the cost of your generics.
Part D premiums
Part D premiums have increased for 2021. For 2021, average Part D premium is $41, up from $32.74 in 2020.
Catastrophic coverage
The catastrophic coverage limit for 2021 is $6,550. This is also called your true out-of-pocket limit or maximum out-of-pocket limit. Each Part D plan can set its own limit, but no plan’s limit can exceed $6,550. If you reach this limit, you only pay 5% of the cost of your prescriptions for the rest of the year.
Lowering drug costs
The Centers for Medicare and Medicaid Services (CMS) have been working on lowering the cost of Medicare Part D. Federal policies are in place to lower the cost of drugs, through
- increasing the use of generics,
- lowering the cost of biosimilars,
- allowing for the purchase of prescriptions from other countries, and
- offering more Part D plans and pharmacy options.
When you can enroll in Part D
From October 15 to December 7, you can enroll or switch to a different plan during Medicare’s open enrollment period.
When the new Part D plan formularies are released, make sure your Part D plan covers your prescriptions for 2021. If not, you might want to switch to a new plan.
Getting help with the cost of Medicare Part D
If your income is below a certain level and the cost of prescriptions is a burden, you can apply for Extra Help with your prescriptions. Apply on Social Security’s website here.
