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What is the Outlook for Medicare Part D 2011?
Below are the details of the 2010 Standard Benefit Model Plan.
:: CMS Part D 2011 Standard Benefit Model Plan Details
:: Brand Drug Coverage Gap Discount Program
:: Reduced Cost sharing for Generic Drugs in the Coverage Gap
:: LIS Benchmarks - lack of qualifying plans
:: Important Medicare Part D Dates for 2010-2011 Updated!
:: 2011 Medical Savings Account (MSA) Plans Deductible
CMS Part D 2011 Standard Benefit Model Plan Details
Here are the highlights for the CMS defined Standard Benefit Plans for 2006, 2007, 2008, 2009, 2010 and 2011. This "Standard Benefit Plan" is the minimum allowable plan to be offered.
- Initial Deductible:
will remain $310 in 2011
- Initial Coverage Limit:
from $2,830 in 2010 to $2,840 in 2011
- Out-of-Pocket Threshold:
will remain $4,550 in 2011
- Coverage Gap (donut hole):
begins once you reach your Medicare Part D plan’s initial coverage limit ($2,840 in 2011) and ends when you spend a total of $4,550 in 2011.
Starting in 2011, Part D enrollees will receive a 50% discount on the total cost of their brand-name drugs while in the donut hole. The full retail cost of the drugs will still apply to getting out of the donut hole even though 50% was paid for by the pharmaceutical manufacturers. Enrollees will pay a maximum of 93% co-pay on generic drugs while in the coverage gap.
- Minimum Cost-sharing in the Catastrophic Coverage Portion of the Benefit**:
will remain the greater of 5% or $2.50 for generic or preferred drug that is a multi-source drug and the greater of 5% or $6.30 for all other drugs in 2011
- Maximum Co-payments below the Out-of-Pocket Threshold for certain Low Income Full Subsidy Eligible Enrollees:
will remain $2.50 for generic or preferred drug that is a multi-source drug and $6.30 for all other drugs in 2011
Medicare Part D Benefit Parameters for Defined Standard Benefit
2006 through 2011 Comparison |
| Part D Standard Benefit Design Parameters: |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
| Deductible - (after the Deductible is met, Beneficiary pays 25% of covered costs up to total prescription costs meeting the Initial Coverage Limit. |
$250 |
$265 |
$275 |
$295 |
$310 |
$310 |
| Initial Coverage Limit - Coverage Gap (Donut Hole) begins at this point. (The Beneficiary pays 100% of their prescription costs up to the Out-of-Pocket Threshold) |
$2,250 |
$2,400 |
$2,510 |
$2,700 |
$2,830 |
$2,840 |
| Total Covered Part D Drug Out-of-Pocket Spending including the Coverage Gap - Catastrophic Coverage starts after this point. |
$5,100.00 |
$5,451.25 |
$5,726.25 |
$6,153.75 |
$6,440.00
plus a
$250
rebate |
$6,447.50
plus a
50%
brand
discount |
Out-of-Pocket Threshold - This is the Total Out-of-Pocket Costs including the Donut Hole.
2011 Example:
$310 (Deductible)
+(($2840-$310)*25%) (Initial Coverage)
+(($6447.5-$2840)*100%) (Cov. Gap)
= $4,550 (Maximum Out-Of-Pocket Cost prior to Catastrophic Coverage - excluding plan premium) |
$3,600
$ 250.00
$ 500.00
$2850.00
$3600.00 |
$3,850
$ 265.00
$ 533.75
$3051.25
$3850.00 |
$4,050
$ 275.00
$ 558.75
$3216.25
$4050.00 |
$4,350
$ 295.00
$ 601.25
$3453.75
$4350.00 |
$4,550
$ 310.00
$ 630.00
$3610.00
$4550.00 |
$4,550
$ 310.00
$ 632.50
$3607.50
$4550.00 |
| Catastrophic Coverage Benefit: |
Generic/Preferred
Multi-Source Drug |
$2.00 |
$2.15 |
$2.25 |
$2.40 |
$2.50 |
$2.50** |
| Other Drugs |
$5.00 |
$5.35 |
$5.60 |
$6.00 |
$6.30 |
$6.30** |
| Part D Full Benefit Dual Eligible Parameters: |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
| Copayments for Institutionalized Beneficiaries |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
| Maximum Copayments for Non-Institutionalized Beneficiaries |
| Up to or at 100% FPL: |
| Up to Out-of-Pocket Threshold |
Generic/Preferred
Multi-Source Drug |
$1.00 |
$1.00 |
$1.05 |
$1.10 |
$1.10 |
$1.10 |
| Other |
$3.00 |
$3.10 |
$3.10 |
$3.20 |
$3.30 |
$3.30 |
Above Out-of-Pocket
Threshold |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
| Over 100% FPL: |
| Up to Out-of-Pocket Threshold |
Generic/Preferred
Multi-Source Drug |
$2.00 |
$2.15 |
$2.25 |
$2.40 |
$2.50 |
$2.50 |
| Other |
$5.00 |
$5.35 |
$5.60 |
$6.00 |
$6.30 |
$6.30 |
Above Out-of-Pocket
Threshold |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
| Part D Non-Full Benefit Dual Eligible Full Subsidy Parameters: |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
| Resources < $6,600 (individuals) or < $9,910 (couples)* |
| Maximum Copayments up to Out-of-Pocket Threshold |
Generic/Preferred
Multi-Source Drug |
$2.00 |
$2.15 |
$2.25 |
$2.40 |
$2.50 |
$2.50 |
| Other |
$5.00 |
$5.35 |
$5.60 |
$6.00 |
$6.30 |
$6.30 |
Maximum Copay above
Out-of-Pocket Threshold |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
$0.00 |
| Resources between $6,600-$11,010 (individuals) or $9,910-$22,010 (couples)* |
| Deductible |
$50.00 |
$53.00 |
$56.00 |
$60.00 |
$63.00 |
$63.00 |
Coinsurance up to
Out-of-Pocket Threshold |
15% |
15% |
15% |
15% |
15% |
15% |
| Maximum Copayments above Out-of-Pocket Threshold |
Generic/Preferred
Multi-Source Drug |
$2.00 |
$2.15 |
$2.25 |
$2.40 |
$2.50 |
$2.50 |
| Other |
$5.00 |
$5.35 |
$5.60 |
$6.00 |
$6.30 |
$6.30 |
| Part D Non-Full Benefit Dual Eligible Partial Subsidy Parameters: |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
| Deductible |
$50.00 |
$53.00 |
$56.00 |
$60.00 |
$63.00 |
$63.00 |
Coinsurance up to
Out-of-Pocket Threshold |
15% |
15% |
15% |
15% |
15% |
15% |
| Maximum Copayments above Out-of-Pocket Threshold |
Generic/Preferred
Multi-Source Drug |
$2.00 |
$2.15 |
$2.25 |
$2.40 |
$2.50 |
$2.50 |
| Other |
$5.00 |
$5.35 |
$5.60 |
$6.00 |
$6.30 |
$6.30 |
| * The actual amount of resources allowable will be updated for contract year 2011. |
| ** The Catastrophic Coverage is the greater of 5% or the values shown in the chart above. In 2010, beneficiaries would be charged $2.50 for those generic or preferred multisource drugs with a retail price under $50 and 5% for those with a retail price greater than $50. As to Brand drugs, beneficiaries would pay $6.30 for those drugs with a retail price under $130 and 5% for those with a retail price over $130. |
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The annual percentage increase in average per capita Part D spending -- used to update the deductible, initial coverage limit, and out-of-pocket threshold for the defined standard benefit for 2011 -- is 4.63 percent. The annual percentage increase in the Consumer Price Index -- used to update the 2011 maximum copayments below the out-of-pocket threshold for certain dual eligible enrollees -- is approximately 1.58 percent. CMS revises these percentages to correct calculation errors identified following the release of the Advance Notice."
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Brand Drug Coverage Gap Discount Program
Pharmaceutical manufacturers will be required to provide certain beneficiaries access to discount prices for certain brand drugs purchased under Medicare Part D. The manufacturer discount prices will be equal to 50% of the plan’s negotiated price defined (minus any applicable dispensing fees). These discount prices must be applied prior to any prescription drug coverage or financial assistance provided under other health benefit plans or programs and after any supplemental benefits provided under the Part D plan. The discounted prices will be charged at the pharmacy (point-of-sale). The beneficiary will not have to do additional paperwork, etc. to receive the benefit.
These manufacturer discount prices will be made available to Part D enrollees who are in the coverage gap or donut hole (they have reached or exceeded the initial coverage limit and have incurred costs below the annual out-of-pocket threshold). Medicare beneficiaries will not be eligible to receive these discount prices if they are enrolled in a qualified retiree prescription drug plan or are eligible for the low-income subsidy. The costs paid by manufacturers towards the negotiated prices of drugs covered under this manufacturer discount program shall be considered incurred costs for eligible beneficiaries and applied towards their out-of-pocket threshold. This means that the total negotiated retail drug price will be applied to the TrOOP and will count toward getting out of the doughnut hole.
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Reduced Cost sharing for Generic Drugs in the Coverage Gap
The coinsurance under basic prescription drug coverage for certain beneficiaries will be reduced for generic covered Part D drugs purchased during the coverage gap (donut hole) phase of the Part D benefit. The coinsurance charged to eligible beneficiaries will be equal to 93% (or actuarially equivalent to an average expected payment of 93%). To be eligible for this reduced cost sharing, a Part D enrollee must have gross covered drug costs above the initial coverage limit and true out-of-pocket costs (TrOOP) below the out-of-pocket threshold. Medicare beneficiaries will not be eligible for this reduced cost sharing if they are enrolled in a qualified retiree prescription drug plan or are eligible for the low-income subsidy.
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LIS Benchmarks - lack of qualifying plans
In some Medicare Part D regions, low income beneficiaries would have a very limited choice of zero-premium prescription drug plans under the statutory methodology for calculating the maximum government premium subsidy. For 2011, Part D plans will be allowed to charge subsidy-eligible beneficiaries a monthly beneficiary premium equal to the applicable low-income premium subsidy amount, if the plan’s adjusted basic beneficiary premium exceeds the low-income premium subsidy amount by a minimal amount. CMS will issue subsequent guidance specifying the minimal amount.
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Important Medicare Part D Dates for 2010-2011 Updated!
- October 1, 2010:
Medicare Part D Prescription Drug plan Marketing Activities can begin - At this time you will be able to once again gather information and evaluate the various Part D plan alternatives.
Please note, no enrollments may be accepted before November 15, 2010.
- November 15 to December 31, 2010:
Annual Coordinated Election Period - Here is your chance to join a Medicare Part D plan for 2011. If you already have a Medicare Part D plan, this is your time to look back over 2010 and make another decision for your 2011 coverage. Should you stay with your existing coverage or make a change? Here is your opportunity to decide. If you make no decision, you will remain in the same plan as you elected in 2010. There is no enrollment required to renew your present coverage. Don't forget the previous years! People who waited until the end of December also waited into January for the arrival of their Welcome Information. Bottom Line: Don't wait until the end of December to make your enrollment decision. (If you do not enroll during this period, your next chance for coverage is January 2012.)
- January 1, 2011:
Your 2011 Medicare Part D plan becomes effective and you will be able to begin using your Part D benefits.
- January 1, 2011 to February 15, 2011:
Starting in 2011, an individual enrolled in a Medicare Advantage plan (Part C) may return to Original Medicare and a stand-alone Part D plan during the first 45 days of the year.
Note: Through the new HealthCare Reform, the Medicare Advantage plan Open Enrollment Period (Jan. 1 - Mar. 31) has been eliminated.
- October 15, 2011 to December 7, 2011:
Annual Coordinated Election Period for 2012 plans.
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2011 Medical Savings Account (MSA) Plans Deductible
The maximum deductible for current law MSA plans for 2011 is $10,600. For MSA demonstration plans, the 2011 minimum deductible amount is $2,200, the maximum out-of-pocket amount is $10,600, and the minimum difference between the deductible and deposit is $1,000.
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Last updated on: 06/10/2010
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Life Insurance plays an important role in your families financial stability.
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