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2013 Medicare Part D Outlook

Below are the finalized 2013 Standard Benefit Model Plan parameters as released by The Centers for Medicare and Medicaid Services (CMS), April 2012.

:: CMS Part D 2013 Standard Benefit Model Plan Details
:: Annual Notice of Change (ANOC) and Other Important Notices to be Sent out Earlier
:: 2013 Annual Election Period (AEP) and Open Enrollment Period (OEP).
:: Closing the Coverage Gap: 2013 Donut Hole Discounts.
:: New 2013 Special Enrollment Period (SEP) to Leave a Consistently Low Rated Medicare Drug or Health Plan
:: 2013 Special Enrollment Period (SEP) to Switch to 5-star Medicare Advantage AND Prescription Drug Plans
:: 2012 Federal Poverty Level Guidelines: LIS Qualification


In the left navigation are links to our 2013 Medicare Prescription Drug (PDP) and Medicare Advantage (MA, MAPD & SNP) plan finders, plus our Drug-Finder and Formulary Browser tools.



CMS Part D 2013 Standard Benefit Model Plan Details

Here are the highlights for the CMS defined Standard Benefit Plan changes from 2012 to 2013. The chart below shows the Standard Benefit design changes for plan years 2009, 2010, 2011, 2012 and 2013. This "Standard Benefit Plan" is the minimum allowable plan to be offered.
  • Initial Deductible:
    will be increased by $5 to $325 in 2013
  • Initial Coverage Limit:
    will increase from $2,930 in 2012 to $2,970 in 2013
  • Out-of-Pocket Threshold:
    will increase from $4,700 to $4,750 in 2013
  • Coverage Gap (donut hole):
    begins once you reach your Medicare Part D plan’s initial coverage limit ($2,970 in 2013) and ends when you spend a total of $4,750 in 2013.
    In 2013, Part D enrollees will continue receive a 52.5% discount on the total cost of their brand-name drugs while in the donut hole. The 50% discount paid by the brand-name drug manufacturer will still apply to getting out of the donut hole, however the additional 2.5% paid by your Medicare Part D plan will not count toward your TrOOP. Enrollees will pay a maximum of 79% co-pay on generic drugs while in the coverage gap.
  • Minimum Cost-sharing in the Catastrophic Coverage Portion of the Benefit**:
    will increase to greater of 5% or $2.65 for generic or preferred drug that is a multi-source drug and the greater of 5% or $6.60 for all other drugs in 2012
  • Maximum Co-payments below the Out-of-Pocket Threshold for certain Low Income Full Subsidy Eligible Enrollees:
    will increase to $2.65 for generic or preferred drug that is a multi-source drug and $6.50 for all other drugs in 2013
      Click here to see a comparison of plan parameters for all years since 2006
Medicare Part D Benefit Parameters for Defined Standard Benefit
2009 through 2013 Comparison
Part D Standard Benefit Design Parameters: 2013 2012 2011 2010 2009
Deductible - (after the Deductible is met, Beneficiary pays 25% of covered costs up to total prescription costs meeting the Initial Coverage Limit. $325 $320 $310 $310 $295
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) $2,970 $2,930 $2,840 $2,830 $2,700
Total Covered Part D Drug Out-of-Pocket Spending including the Coverage Gap - Catastrophic Coverage starts after this point.

See note (1) below.
$6,733.75 (1)

plus a 52.50% brand discount
$6,657.50 (1)

plus a 50% brand discount
$6,447.50 (1)

plus a 50% brand discount
$6,440.00


plus a
$250 rebate

$6,153.75
Out-of-Pocket Threshold - This is the Total Out-of-Pocket Costs including the Donut Hole.
2013 Example:
   $325 (Deductible)
+(($2970-$325)*25%) (Initial Coverage)
+(($6733.75-$2970)*100%)(Cov. Gap)
= $4,750 (Maximum Out-Of-Pocket Cost prior to Catastrophic Coverage - excluding plan premium)
$4,750



$325.00
$661.25

$3,763.75

$4,750.00



$4,700



$320.00
$652.50

$3,727.50

$4,700.00



$4,550



$310.00
$632.50

$3,607.50

$4,550.00



$4,550



$310.00
$630.00

$3,610.00

$4,550.00



$4,350



$295.00
$601.25

$3,453.75

$4,350.00



Total Estimated Covered Part D Drug Out-of-Pocket Spending including the Coverage Gap Discount (NON-LIS) See note (2). $6,954.52 $6,730.39 $6,483.72    
Catastrophic Coverage Benefit:
   Generic/Preferred
   Multi-Source Drug
(3)
$2.65 (3) $2.60 (3) $2.50 (3) $2.50 (3) $2.40 (3)
    Other Drugs (3) $6.60 (3) $6.50 (3) $6.30 (3) $6.30 (3) $6.00 (3)
Part D Full Benefit Dual Eligible (FBDE) Parameters: 2013 2012 2011 2010 2009
   Deductible $0.00 $0.00 $0.00 $0.00 $0.00
   Copayments for
   Institutionalized
   Beneficiaries
$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
$1.15 $1.10 $1.10 $1.10 $1.10
      Other $3.50 $3.30 $3.30 $3.30 $3.20
     Above Out-of-Pocket
     Threshold
$0.00 $0.00 $0.00 $0.00 $0.00
    Over 100% FPL:
        Up to Out-of-Pocket Threshold
      Generic/Preferred
      Multi-Source Drug
$2.65 $2.60 $2.50 $2.50 $2.40
      Other $6.60 $6.50 $6.30 $6.30 $6.00
     Above Out-of-Pocket
     Threshold
$0.00 $0.00 $0.00 $0.00 $0.00
Part D Full Subsidy - Non Full Benefit Dual Eligible Full Subsidy Parameters: 2013 2012 2011 2010 2009
Eligible for QMB/SLMB/QI, SSI or applied and income at or below 135% FPL and resources < $6,940 (individuals) or < $10,410 (couples) (4)
   Deductible $0.00 $0.00 $0.00 $0.00 $0.00
    Maximum Copayments up to Out-of-Pocket Threshold
      Generic/Preferred
      Multi-Source Drug
$2.65 $2.60 $2.50 $2.50 $2.40
      Other $6.60 $6.50 $6.30 $6.30 $6.00
   Maximum Copay above
   Out-of-Pocket
   Threshold
$0.00 $0.00 $0.00 $0.00 $0.00
Partial Subsidy Parameters: 2013 2012 2011 2010 2009
Applied and income below 150% FPL and resources between $6,941-$11,570 (individuals) or $10,411-$23,120 (couples) (category code 4) (4)
   Deductible $66.00 $65.00 $63.00 $63.00 $60.00
   Coinsurance up to
   Out-of-Pocket
   Threshold
15% 15% 15% 15% 15%
      Generic/Preferred
      Multi-Source Drug
$2.65 $2.60 $2.50 $2.50 $2.40
      Other $6.60 $6.50 $6.30 $6.30 $6.00
(1) Total Covered Part D Spending at Out-of-Pocket Threshold for Non-Applicable Beneficiaries - Beneficiaries who ARE entitled to an income-related subsidy under section 1860D-14(a) (LIS)
(2) Total Covered Part D Spending at Out-of-Pocket Threshold for Applicable Beneficiaries - Beneficiaries who are NOT entitled to an income-related subsidy under section 1860D-14(a) (NON-LIS) and do receive the coverage gap discount. For 2013, the weighted gap coinsurance factor is 94.4593%. This is based on the 2011 PDEs (85.6% Brands & 14.4% Generics)
(3) The Catastrophic Coverage is the greater of 5% or the values shown in the chart above. In 2013, beneficiaries would be charged $2.65 for those generic or preferred multisource drugs with a retail price under $53 and 5% for those with a retail price greater than $53. As to Brand drugs, beneficiaries would pay $6.60 for those drugs with a retail price under $132 and 5% for those with a retail price over $132.
(4) The actual amount of resources allowable may be updated for contract year 2013.
                                Click here to see a comparison of plan parameters for all years since 2006


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 2013 -- is 4.29 percent. The annual percentage increase in the Consumer Price Index -- used to update the 2013 maximum copayments below the out-of-pocket threshold for certain dual eligible enrollees -- is approximately 1.40 percent. CMS revises these percentages to correct calculation errors identified following the release of the Advance Notice."
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Annual Notice of Change (ANOC) and Other Important Notices to be Sent out Earlier

The 2013 plan year standardized, combined Annual Notice of Change (ANOC) and Evidence of Coverage (EOC) document will be mailed to current members of all Medicare Advantage (MA) plans, Medicare Advantage with Prescription Drug Coverage (MA-PD) plans, Prescription Drug Only (PDP) plans and cost-based plans offering Part D. MA and MA-PD plans must ensure current members receive the combined ANOC/EOC by September 30, 2012. Plans have the option to include Pharmacy/Provider directories in this mailing.

All plans offering Part D must mail their Low-Income Subsidy (LIS) riders and abridged or comprehensive formularies with the ANOC/EOC to ensure current member receipt by September 30, 2012.

Exception: Dual Eligible Special Needs Plans (SNPs) that are fully integrated with the State must mail an ANOC with the Summary of Benefits (SB) for member receipt by September 30, 2012 and then send the EOC for member receipt by December 31, 2012. Fully Integrated Dual Eligible SNPs that send a combined, standardized ANOC/EOC for member receipt by September 30, 2012 are not required to send an SB to current members.

Note: With the exception of the ANOC/EOC, LIS Rider, and abridged or comprehensive formularies, no additional materials may be sent prior to the beginning of when marketing activities may begin on October 1.
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2013 Annual Election Period (AEP) and Open Enrollment Period (OEP).

he Annual Election Period (AEP) and Open Enrollment Period (OEP) will begin on October 15, 2012 and end on December 7, 2012. Marketing of Medicare Part D plans will begin on October 1, 2012. Your new Medicare Part D plan will still take effect on January 1, 2013. This three week period after the close of the AEP/OEP will allow the Part D Plans and Medicare to process new enrollments and get welcome kits and membership cards out to member prior to the January 1st plan effective date.
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Closing the Coverage Gap: 2013 Donut Hole Discounts.

In plan year 2013, Medicare beneficiaries who reach the Coverage Gap (Donut Hole) will receive a 21% discount on generic drugs purchased and a 52.5% (50% paid by the drug manufacturer and 2.5% paid by the Medicare Part D plan) discount on brand name drugs.
: : Read more on the discounts from 2011 through 2020 here.
: : See Questions and Answers on Closing the Coverage Gap here.
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New 2013 Special Enrollment Period (SEP) to Leave a Consistently Low Rated Medicare Drug or Health Plan

To promote high Medicare Part D and MA plan quality, in 2013, The Centers for Medicare and Medicaid Services (CMS) will alert plan members if their Medicare Part D drug plan or Medicare Advantage health plan has failed for three straight years to achieve at least a 3-star quality rating and offer a Special Enrollment Period (SEP), if desired, that will allow the member to move to a higher quality plan.
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2013 Special Enrollment Period (SEP) to Switch to 5-star Medicare Advantage AND Prescription Drug Plans

Beginning in 2012, CMS established a Special Enrollment Period (SEP) to allow Medicare beneficiaries eligible for Medicare Prescription Drug (PDP) Plans or Medicare Advantage (MA & MAPD) plans to switch to a 5-star plan at any point during the year.

CMS is exercising its existing statutory authority under Section 1851(e)(4)(D) of the Social Security Act to establish this special election period.

The creation of this SEP is part of CMS’ overall quality effort, combined with the quality bonus payment demonstration, to give plans greater incentive to achieve 5-star status. Plan ratings for the 2013 plan year will be published in the fall of 2012, prior to the annual open enrollment period.

Who will be eligible for this SEP?
  • Beneficiaries currently enrolled any MA, MAPD or PDP plan (including those that already have a 5-star rating)
  • Beneficiaries who are enrolled in Original Medicare and meet the eligibility requirements for Medicare Advantage
The summary star rating is provided by CMS prior to the Annual Election Period (AEP) and is effective for the following contract year (January - December) -- the summary rating is awarded on a calendar year basis.

Effective dates for enrollments made under this SEP will be the first of the month following the month the enrollment request is received. Once an individual enrolls in a 5-star plan using this SEP, the individual's SEP ends for that plan year and the individual will be limited to making changes only during other applicable election periods. To summarize, the 5-star rating SEP can only be used one time during the plan year.

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2012 Federal Poverty Level Guidelines: LIS Qualification

The 2012 Federal Poverty Level (FPL) Guidelines determine the income level requirements for people applying for the Low Income Subsidy (LIS) program. If your income is below 135% of the FPL ($15,079.50 if you are single or $20,425.50 for married couples), you could qualify for the full Low Income Subsidy (resource limits also apply - see chart above). Even if you don’t qualify for full LIS benefits, you could be eligible for partial LIS benefits if your income level is at or below 150% FPL (resource limits also apply - see chart above). Remember, the LIS subsidy helps to pay both your monthly plan premiums and drug costs.

Go to our blog to review more about the 2012 Federal Poverty Level Guidelines: 2012-2013 LIS Qualifications

Persons
in Family
48 Contiguous
States & D.C.
Alaska Hawaii
1 $11,170 $13,970 $12,860
2 $15,130 $18,920 $17,410
3 $19,090 $23,870 $21,960
4 $23,050 $28,820 $26,510
5 $27,010 $33,770 $31,060
6 $30,970 $38,720 $35,610
7 $34,930 $43,670 $40,160
8 $38,890 $48,620 $44,710
For each additional
Person, add
$3,960 $4,950 $4,550
Federal Register Volume 77, Number 17 (Thursday, January 26, 2012), pp. 4034-4035

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Tips & Disclaimers
  • The Medicare Advantage and Medicare Part D prescription drug plan data on our site comes directly from Medicare and is subject to change.
  • Medicare has neither reviewed nor endorsed the information on our site.
  • We provide our Q1Medicare.com site for educational purposes and strive to present unbiased and accurate information. However, Q1Medicare is not intended as a substitute for your lawyer, doctor, healthcare provider, financial advisor, or pharmacist. For more information on your Medicare coverage, please be sure to seek legal, medical, pharmaceutical, or financial advice from a licensed professional or telephone Medicare at 1-800-633-4227.
  • Benefits, formulary, pharmacy network, provider network, premium and/or co-payments/co-insurance may change on January 1 of each year. Our PDP-Compare.com and MA-Compare.com provide highlights of annual plan benefit changes.
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  • Limitations, copayments, and restrictions may apply.
  • We make every effort to show all available Medicare Part D or Medicare Advantage plans in your service area. However, since our data is provided by Medicare, it is possible that this may not be a complete listing of plans available in your service area. For a complete listing please contact 1-800-MEDICARE (TTY users should call 1-877-486-2048), 24 hours a day/7 days a week or consult www.medicare.gov.
  • When enrolling in a Medicare Advantage plan, you must continue to pay your Medicare Part B premium.
  • Medicare beneficiaries with higher incomes may be required to pay both a Medicare Part B and Medicare Part D Income Related Monthly Adjustment Amount (IRMAA). Read more on IRMAA.
  • Medicare Advantage plans that include prescription drug coverage (MAPDs) are considered Medicare Part D plans and members with higher incomes may be subject to the Medicare Part D Income Related Monthly Adjustment Amount (IRMAA), just as members in stand-alone Part D plans. In certain situations, you can appeal IRMAA.
  • You must be enrolled in both Medicare Part A and Part B to enroll in a Medicare Advantage plan. Members may enroll in a Medicare Advantage plan only during specific times of the year. Contact the Medicare plan for more information.
  • If you are enrolled in a Medicare plan with Part D prescription drug coverage, you may be eligible for financial Extra Help to assist with the payment of your prescription drug premiums and drug purchases. To see if you qualify for Extra Help, call: 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048, 24 hours a day/ 7 days a week or consult www.medicare.gov; the Social Security Office at 1-800-772-1213 between 7 a.m. and 7 p.m., Monday through Friday. TTY users should call, 1-800-325-0778; or your state Medicaid Office.
  • Medicare evaluates plans based on a 5-Star rating system. Star Ratings are calculated each year and may change from one year to the next.
  • A Medicare Advantage Private Fee-for-Service plan (PFFS) is not a Medicare supplement plan. Providers who do not contract with the plan are not required to see you except in an emergency.
  • Disclaimer for Institutional Special Needs Plan (SNP): This plan is available to anyone with Medicare who meets the Skilled Nursing Facility (SNF) level of care and resides in a nursing home.
  • Disclaimer for Dual Eligible (Medicare/Medicaid) Special Needs Plan (SNP): This plan is available to anyone who has both Medical Assistance from the State and Medicare. Premiums, co-pays, co-insurance, and deductibles may vary based on the level of Extra Help you receive. Please contact the plan for further details.
  • Disclaimer for Chronic Condition Special Needs Plan (SNP): This plan is available to anyone with Medicare who has been diagnosed with the plan specific Chronic Condition.
  • Medicare MSA Plans combine a high deductible Medicare Advantage Plan and a trust or custodial savings account (as defined and/or approved by the IRS). The plan deposits money from Medicare into the account. You can use this money to pay for your health care costs, but only Medicare-covered expenses count toward your deductible. The amount deposited is usually less than your deductible amount, so you generally have to pay out-of-pocket before your coverage begins.
  • Medicare MSA Plans do not cover prescription drugs. If you join a Medicare MSA Plan, you can also join any separate (stand-alone) Medicare Part D prescription drug plan
  • There are additional restrictions to join an MSA plan, and enrollment is generally for a full calendar year unless you meet certain exceptions. Those who disenroll during the calendar year will owe a portion of the account deposit back to the plan. Contact the plan provider for additional information.
  • Medicare beneficiaries may enroll through the CMS Medicare Online Enrollment Center located at www.medicare.gov.
  • Medicare beneficiaries can file a complaint with the Centers for Medicare & Medicaid Services by calling 1-800-MEDICARE 24 hours a day/7 days or using the medicare.gov site. Beneficiaries can appoint a representative by submitting CMS Form-1696.


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