2019 Medicare Donut Hole: Everything You Need to Know
According to the Henry J Kaiser Family Foundation, 43 million Medicare beneficiaries are enrolled in a Part D plan. This accounts for 72% of Medicare beneficiaries nationwide! When Medicare Part D started in 2006, beneficiaries were required to pay 100% of the costs for brand name drugs. That percentage has decreased consistently over the years, but 2019 will be the best year yet for selling Part D plans. Why? The Medicare donut hole is closing!
Medicare Donut Hole Costs and Changes
The Medicare Part D donut hole is scheduled to close completely in 2020. Thanks to the Bipartisan Budget Act of 2018, the gap will close a whole year ahead of schedule. However, the gap is only closing for brand-name drugs. The gap for generic drugs will decrease, but will not be completely eliminated until 2020.
In 2019, beneficiaries will pay 25% of brand-name drugs during their initial coverage period and in the donut hole. This means the Medicare donut hole is completely closed for brand-name drugs. However, beneficiaries will still be responsible for 37% of generic drug costs in 2019 while in the donut hole. The plan is for this to decrease to a max of 25% in 2020, effectively closing the gap. Other Medicare donut hole costs for 2019 include:
- Initial Deductible: increasing by $10 ($405 to $415)
- Initial Coverage Limit: increasing by $70 ($3,750 to $3,820)
- Out-of-Pocket Threshold: increasing by $100 ($5,000 to $5,100)
How does the Medicare donut hole impact agents?
The gap may not be closed for generic drugs, but beneficiaries generally have the most hardship in the donut hole from brand-name drugs. Since brand-name is more expensive, most beneficiaries would switch to generic while in the gap. However, some medications may not have a suitable generic alternative. This means beneficiaries were often put in a difficult financial situation until they reach the catastrophic coverage.
Since 2006, the number of stand-alone Medicare Part D plans have steadily decreased. However, the downward trend stopped in 2017 and the number of plans has grown ever since. 2019 alone will see a 15% increase in plans! This means that selling Part D plans just became that much easier. Ready to start selling? At Senior Market Advisors, we contract with all the major carriers in your state! Our lead management system, online sales training, custom quote engine, and top tier commissions help make sure our agents are set up for success. To start contracting fill out this form or give us a call at 844-452-5020.