There are some very important changes to Medicare part D plans for 2024.
These are the most significant changes to part D since part D plans were created in the early two thousands.
I'm going to review some of these changes and what they mean for you.
Then I'm going to discuss what I see from the insurance companies and what you need to look out
for as you shop for the right prescription drug plan for your needs and your budget.
So let's get started
…
If we haven't met yet I'm Matthew Claasen CEO of Medigap seminars.org.
We're one of the premier independent insurance brokerages in the country, specializing in Medicare.
Our services are free to you the consumer. And as I say in the opening of all of my videos our
goal is to help you make an informed decision regarding your Medicare.
Every year I provide a breakdown of the four stages of part D.
And my website under the resources tab you'll find the
breakdown for 2024 and 2023.
The 2023 version will be up only
until the 23 plants are no longer available.
Before I get into the four stages of part D let's quickly review some of the part D basics that you need to know.
First. All part D prescription drug plans must include a formulary.
Uh formulary is their list of covered drugs.
The formulary is usually broken down into five different tiers Some plans have six tiers.
The lower the tier the less the prescription will cost you.
Tier one is common generics. Tier two may also
include generics and some common brand name drugs.
Tier three is usually brand name drugs with which the insurance company has a contract for a lower price.
Tears four and five are expensive. less common drugs or specialty drugs.
Every part D plan formulary must cover a minimum of two different drugs from each category of drugs.
Plus substantially all of the drugs that are available in the six protected categories that
include the anti-cancer drugs, immunosuppressants anticonvulsants antidepressants.
And try retrovirals and anti-psychotics.
The objective is that no matter what type of prescription medication you need.
Your part D plan will cover that medication or an equivalent alternative.
This also means that you don't need to come up with a hypothetical ailments
or prescriptions to select the right plan for the coming year.
You're not going to be in a situation where your part D coverage will not have an alternative
drug If they don't cover your specific prescription.
If you are prescribed a drug not on the formulary you and your doctor can appeal to the part D
plan to have that drug added to the formulary just for you.
If your appeal is successful. Then you usually pay the tier three price for that drug.
More on tier three costs later… With that out of the way
let's go over the stages of part D prescription drug coverage.
Stage one is the deductible stage.
The deductible is the amount of money that you must spend on prescriptions.
Before your part D plan pays any benefits.
Each year Medicare sets the maximum allowed deductible.
In 2023 that maximum deductible was $505.
For 2024 the maximum deductible is $545
… This is important part
D plans can choose to have a lower deductible.
Some have no deductible. Many will choose to exempt tier
one drugs and often tier two drugs from the deductible.
And this can save you a lot of money If you need a basic generic prescription… How the
deductible is structured is a very important plan feature that you should be aware of.
And it should be part of your decision-making process.
And my how to shop for part D video I illustrate how you
can use this on the part D shopper.com website.
Stage two is the stage where you have a cost share.
You'll pay a portion of the cost for each prescription and the part D plan will pay the rest.
The amount you pay will depend on the tier of the drug.
The lower the tier the less you're going to pay.
And this continues until the total amount spent between the part D plan and your out of pocket
costs equals $5,030.
Then you move to stage three. Stage three is different this year than it was last year And the.
obligation is the same You pay 25% of the prescription costs in this stage.
However for this year the remaining 75%.
Is shared between the manufacturer and the part D insurance plan.
In previous years the part D insurance company finished their financial obligation at the end of
stage two this year and going forward the insurance company pays costs in every stage, but the
consumer has no more out-of-pocket expenses after stage three.
When the total out-of-pocket expenditures including your costs the part D insurance company's
costs and the manufacturer's cost including discounts reaches $8,000.
Then you move to stage four. Now this is important.
It's estimated that by the end of stage three, the average consumer will have a total
out-of-pocket for prescriptions of approximately $3,330.
That is the soft maximum out of pocket expense for the consumer.
And soft because the exact total will depend on the type of prescriptions you're on.
As of 2025 there will be a hard maximum out of pocket of $2,000.
So lastly they're stage four. Stage four is also
different than in previous years Stage four is called catastrophic coverage.
In past years the consumer was obligated to pay 5% of drug costs in this stage.
As of 2024 the consumer pays nothing.
The consumer reaches their maximum out of pocket during stage three.
Now I like this chart published by um the kff.org Kaiser family foundation.
It's a great illustration of how the part D plan is changing in 2024.
In 2025. So in this current year as I'm filming this in
2023 the consumer in all.
participated in every stage of the part D plan.
And then in 2024 the consumer stops paying once catastrophic coverage has reached.
In 2025 there's no more donut hole.
That means there are only three stages and the consumer stops paying at the end of stage two.
You can also see that the part D insurance plans take on a lot more of the prescription costs.
They have a higher financial exposure. As a result we see
changes in your part D plan As of this coming 2024.
So first let's talk about plan premiums in 2024.
Some part D plans have significantly higher premiums in 2024.
That is in part because from 2024 forward
there's a 6% cap on premium increases.
Water insurance company is going to do to combat this cap on premium increases.
Here's some things that are important to remember.
Insurance companies may adjust their formulary to make it
more likely that you'll pay a tier three price.
They might increase your cost share And I've already seen some, a number of plans changed from
charging Let's say $50 for a tier three drug to charging 50%.
So $500 prescription goes from costing $50 to 250…
More companies are likely to go from exempting
both tier one and tier two drugs from the deductible.
To only exempting tier one drugs.
And lastly, the insurance company can always cancel a
part D drug plan and replace it with another.
If they need to raise the premium significantly this is a likely option.
So let's talk about that last point for a moment.
Canceling a specific insurance plan is releve.
common with both part D prescription drug plans and Medicare advantage plans.
They're easy to cancel because they're simply annual plans They all end on December 31st of each
year… So what happens if your plan is canceled?
If you don't shop for a new plan the insurance company has the
authority to cross walk you to the plan of their choice.
What is cross-walking. When your plan is canceled if you don't apply for a new plan during the
annual enrollment period, the insurance company will enroll you in a plan of their choice.
And that's supposed to have a similar formulary to the plan that was canceled… When insurance
companies create a new plan they often use a confusing similar name like canceling silver scrip
smart RX and replace the gate with silver script smart saver.
Or canceling WellCare value script and replacing it with WellCare value express.
If you aren't paying attention, you may have no idea what just happened.
It's kind of like a three-card Monte only with insurance plans… So as an aside
that I don't see any major cross-walking this year but I anticipate that it will be going
forward So it is good to know about.
Anyway, the new plan can then have a new
premium not restricted or limited by the old premium.
And that brings me to what to watch for when looking at the zero premium or ultra low premium
standalone part D plans that are introduced in 2024.
Many of us in the industry believe that the ultra low premium
plans will be used to gather a telemarketing list.
This may be followed by a telemarketing or other marketing this year or next attempting to
switch you to Medicare advantage plans.
These telemarketers will often be employees of the insurance company that are not.
required to follow the same guidelines and procedures that are required out of independent
insurance brokers… To be clear there is no free lunch So please use caution when selecting an
ultra premium plan, make sure to follow the steps that I
detail in my how to shop for part D video for this year.
In addition to this video in 2020 for part D plans.
I have a how to video for shopping plans on my part D shopper.com website.
As well as an extra, there'll be kind of insurance company insights for 2024.
Again that's all on my part D shopper.com website.
The bottom line is that you the consumer need to pay more attention now to your part D plan and
be more diligent in your shopping.
And don't worry It's not that difficult I show you step-by-step how to shop and compare plans.
In my how to shop for part D plans video only accessible.
And part D shopper.com. It's free It's just.
Linked there. So please take the time
to look closely at your part D choices.
So now it's your term I make these videos for you to help you make an informed decision.
So please leave me a comment below and let me know what part of this
video that you found most informative or entertaining.
And if you have a question that I didn't answer ask it below and I
will respond I am interested in what you have to say.
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contact us at the at the office here in that contact information.
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I'm Matthew Claassen with Medigap
seminars.org. Thank you for watching.