The Centers for Medicare and Medicaid Services (CMS) recently announced the indexed Medicare Part D standard benefit and retiree drug subsidy (RDS) amounts for 2014. Because program costs have been declining, copayments and deductibles will be lower in 2014 than they were in 2013, according to CMS. The Part D standard benefit deductible will be $310 (down from $325 in 2013). The initial coverage limit will be $2,850 (down from $2,970 in 2013), and the out-of-pocket threshold will be $4,550 (down from $4,750 in 2013).

The cost threshold and cost limit for the RDS will also be lower in 2014 than they were in 2013. Plan sponsors eligible for the RDS will receive 28% of each retiree’s costs for prescription drugs otherwise covered by Part D between $310 and $6,350 (down from a cost threshold of $325 and a cost limit of $6,600 in 2013).

Medicare Part D benefit parameters for defined standard benefit, low-income subsidy and retiree drug subsidy

Towers Watson Media

 

Endnotes

  1. CPI adjustment applies to copayments for noninstitutionalized beneficiaries up to or at 100% FPL.
  2. For beneficiaries who are not considered an "applicable beneficiary" under Social Security law and are not eligible for the coverage gap program, this is the amount of total drug spending required to reach the out-of-pocket threshold in the defined standard benefit. Enhanced alternative plans must use this value when mapping enhanced alternative plans to the defined standard benefit for the purpose of calculating covered plan paid amounts reported on prescription drug event records.
  3. For beneficiaries who are considered an "applicable beneficiary" under Social Security law and are eligible for the coverage gap discount program, this is the estimated average amount of total drug spending required to reach the out-of-pocket threshold in the defined standard benefit. Enhanced alternative plans must use this value when mapping enhanced alternative plans to the defined standard benefit for the purpose of calculating covered plan paid amounts reported on prescription drug event records.
  4. Full-benefit dual eligibles who would be institutionalized if the individual (couple) was not receiving home- and community-based services qualify for zero cost sharing as of January 1, 2013.
  5. The increases to the LIS deductible, generic/preferred multisource drugs and other drugs copayments are applied to the unrounded 2013 values of $66.14, $1.16 and $3.49, respectively.
  6. The amount of resources allowable will be updated for contract year 2014.