Drug companies will pay more to
lower some Part D costs
by Dena Bunis, AARP,
February 9, 2018
Medicare Part D beneficiaries who have high prescription drug
expenses currently have to pay more once the total cost of their medicines
reaches a certain threshold.
En español | Medicare beneficiaries with
high annual prescription drug costs will get some relief a year earlier than
expected as a result of the budget deal President Trump signed early Friday.
Part D beneficiaries
who have high prescription drug expenses currently have to pay more once the
total cost of their medicines reaches a certain threshold. That’s due to a
quirky aspect of Part D called the coverage gap, also known as the "doughnut hole."
The doughnut hole has
been narrowing each year since the Affordable Care Act (ACA) was passed in
2010. The gap was scheduled to close in 2020, when beneficiaries
would be expected to pay 25 percent of the cost of all their prescriptions
while they were in the gap.
Under Friday’s budget
deal, the doughnut hole will now close next year. Beginning in 2019, Part D enrollees will pay 25 percent of the
cost of all their prescription drugs from the time they enter the gap until
they reach catastrophic coverage.
For 2018, the
threshold for entering the doughnut hole remains at $3,750 worth of drug costs.
Once a Medicare enrollee passes that limit, he or she is in the coverage gap
and will have to pay 35 percent of the cost of brand-name drugs and 44 percent
of generics. They will continue to pay those costs until their out-of-pocket
spending reaches $5,000. Once they hit that limit, they’ll no longer be in the
doughnut hole and will pay no more than 5 percent of their drug costs for the
rest of the year.
Congress made the
early close of the doughnut hole possible by requiring certain pharmaceutical
manufacturers to pay more of the costs for enrollees who are in the coverage
gap. Currently, brand-name drugmakers pay 50 percent of enrollees’ brand name
drug costs while they are in the coverage gap. Under Friday’s budget law, they
will now pay 70 percent.
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