If you’re 65 or older, make sure Medicare Open Enrollment is on your calendar. It is an important time of year to review your current medical coverage and healthcare needs — and select the most appropriate Medicare plan for the new year.
Even if you’re already enrolled in Medicare, it’s still a good idea to review your plan, considering that coverage and your health needs may change from year to year. If you will become eligible for Medicare coverage for the first time in 2024, now is a good time to start learning about the different types of Medicare (i.e., Medicare Parts A, B, C, and D) and what they mean for you.
The open enrollment period for Medicare 2024 begins on October 15, 2023, and ends on December 7, 2023. Here’s what you need to know about Medicare to ensure you’re prepared, especially for Medicare Part D Open Enrollment.
What are the different types of Medicare?
Medicare is an insurance plan provided by the federal government and overseen by the Centers for Medicare and Medicaid Services (CMS). Medicare coverage is divided into four general sections, each of which covers different services. You must be enrolled in Parts A and B to be eligible for Part D.
Medicare Part A covers hospital expenses (i.e., pays for costs if you are hospitalized or placed in a nursing home). Medicare Part B covers outpatient services, such as doctor’s visits, labs, immunizations, X-rays, and surgeries that don’t require you to stay overnight in a hospital.
Medicare Part C, also known as Medicare Advantage, is a type of Medicare coverage offered by private insurance companies that contract with CMS. It is available to anyone enrolled in Medicare Parts A and B. Medicare Advantage plans cover not only the services provided by Parts A and B, but may also offer dental, vision, and/or prescription drug coverage.
Medicare Part D is a supplemental form of Medicare that specifically covers prescription drug services. If you are enrolled in Parts A and B, you can enroll in a Part D plan for prescription coverage.Back to top
Why would you want to get Medicare Part D?
Medicare Part A covers only medications that you receive while you are in a hospital or a skilled nursing facility. Medicare Part B covers only a limited number of medications and typically only if they are administered in an outpatient setting (such as a doctor’s office or clinic). Examples include vaccines, injectable medications, and medications administered via IV.
This lack of regular prescription coverage can be a significant problem for older adults. According to a 2018 report published by the CDC, more than 87% of adults aged 65+ take at least one prescription drug per month, and almost 40% take five or more prescription drugs monthly. If you’re 65 or older, it’s worth looking into how signing up for Medicare Part D coverage may save you money, especially if you are already taking multiple prescriptions.Back to top
Who qualifies for Medicare Part D?
Anyone who is eligible for Medicare coverage is also eligible for Medicare Part D. Generally, you will qualify for Medicare if you are age 65 or older. People who are about to turn 65 can apply for Medicare outside of the regular open enrollment period during their 65th birthday month, as well as the three months before and after (although coverage does not start until you turn 65).
If you are under 65, you may also qualify under special circumstances: for example, if you’re disabled (and have been receiving disability checks from the Social Security Disability Insurance for at least 24 months), have end-stage renal disease, or have ALS (i.e., Lou Gehrig’s disease).Back to top
How can you sign up for Medicare Part D?
Once you are enrolled in Medicare Parts A and B, you can sign up for Medicare Part D coverage on the Medicare Plan Finder page. You can review and select health plans after entering your ZIP code and answering a series of questions. If you are already enrolled in a Medicare Part D plan, your plan will automatically renew, so technically, you’ll only need to visit the website if you want to change plans. However, it’s still a good idea to review your plan every year in case your current plan has changed or to see whether a different plan would better fit your current needs.Back to top
How much does it cost?
The Medicare Plan Finder page will give you pricing information. You will be prompted to type in your list of medications and select your preferred pharmacy. The website will then provide a list of plans from which you can choose. The cost of your Medicare Part D plan may vary based on the plan you select and where you live. You’ll want to compare plan costs and copays to determine which plan will work best for you.Back to top
2024 Medicare Part D Highlights
Here is some important information about Medicare Part D for 2024.
Cost Improvements Due to the Inflation Reduction Act
The 2022 Inflation Reduction Act includes many updates to Medicare Part D. Improvements began in 2023 and will continue to be rolled out until 2029. Here are some important highlights for 2024 that may help keep your prescription drug costs down.
The maximum copay for insulin is $35. The cost of a 30-day supply of any insulin products covered by Medicare Part D will always be $35 (or less), even if you haven’t met your deductible or true (or total) out-of-pocket (TrOOP) threshold. This is the same as last year.
There is no copay for any approved vaccines. Any vaccines recommended for adults by the Advisory Committee on Immunization Practices (ACIP) will continue to be available at no cost, even if you haven’t met your deductible or your TrOOP threshold. This includes vaccines such as influenza, COVID-19, shingles, and pneumonia.
Those who used to qualify only for Partial Low-Income Subsidy (LIS) status will now qualify for Full LIS status. Those with incomes between 135% and 150% of the Federal Poverty Level will now qualify for Full LIS benefits. Previously, they qualified only for partial low-income subsidy benefits. With Full LIS benefits, you can have monthly premiums of $0, no deductible, and very low drug copays.
Coverage for Alzheimer’s Medication
Another important change to Medicare Part D coverage isn’t related to the Inflation Reduction Act — and actually went into effect in the summer of 2023. Medicare Part D now offers broader coverage for the Alzheimer’s drug lecoanemab (brand name Leqembi) because the FDA has granted approval for the drug.
To qualify for Medicare Part D coverage, you must be diagnosed with mild Alzheimer’s disease or mild cognitive impairment, have evidence of beta-amyloid plaque on the brain, and see a doctor who participates in a qualifying registry for the drug.
Here are the price updates for various elements of Medicare Part D for 2024, including the initial deductible, the initial coverage limit, and the TrOOP threshold.
1. The initial deductible will increase by $40 for 2024, to $545. This means you’ll pay slightly more before Medicare Part D begins paying its share if you have a plan with the highest possible deductible. After the deductible is met, you pay 25% of the covered costs up to the initial coverage limit. Some plans may offer a $0 deductible for lower-cost (Tier 1 and Tier 2) drugs.
2. The initial coverage limit (ICL) will increase from $4,660 in 2023 to $5,030 in 2024. This means you can purchase prescriptions worth $5,030 before entering what’s known as the Medicare Part D Donut Hole, which has historically been a gap in coverage. Thanks to cost sharing with your Medicare Part D plan and drug manufacturers, being in the Donut Hole isn’t nearly as expensive as it used to be — and exiting it may be easier than you’d think.
In the Donut Hole, you’ll pay 25% for brand-name drugs. The manufacturer will give you a 70% discount during this time, and your Medicare Part D plan will pick up the remaining 5%.
The 25% you pay, plus the 70% discount from the manufacturer, will count toward your combined TrOOP (see below), which is when you exit the Donut Hole.
For example, if your brand-name drug costs $100, you would pay $25, your Medicare Part D plan would pay $5, and you’d receive a $70 discount from the manufacturer. A total of $95 would count toward meeting your TrOOP.
The situation is different for generic drugs. You still pay 25%, and your Medicare Part D plan covers the other 75%. However, only the 25% you pay counts towards meeting your TrOOP.
If your generic drug costs $100, you would pay $25, your Medicare Part D plan would pay $75, and $25 would count toward meeting your TrOOP.
3. The Medicare Part D TrOOP threshold will bump up to $8,000 in 2024, a $600 increase from the previous year. The TrOOP threshold marks the point at which Medicare Part D Catastrophic Coverage begins.
4. There is no longer any copay or cost-sharing for prescription medications during the catastrophic coverage phase. The beneficiary cost-sharing during the Catastrophic coverage phase has been eliminated as of January 2024. This means you will not have any copays or cost-sharing once you hit your $8,000 TrOOP.
To understand more about the changes Medicare Part D for 2024 and what they mean for you, talk to your pharmacist at your local Good Neighbor Pharmacy.