Medicare Part D Drug Deductibles Explained

Being well-versed in all things insurance is not common! Most people know very little about insurance. BUT most people know what a deductible is! You pay that first, before the insurance company is responsible for any costs. Unlike the deductible you’re probably familiar with, not all plans charge deductibles on all drugs. Your insurance plan could offer you cheap medications without a deductible. 

 

Back in 2005, when Medicare Part D started offering prescription coverage, there was a cap of $100. Most plans didn’t require a deductible for a few years. The maximum annual deductible cap is determined by the government. Deductibles went from $100 in 2005 to $545 in 2024. That’s up about $40 from 2023.

The terminology used to describe this is tier. Medicare Part D Tier 1 and Tier 2 drugs, are typically cheaper, generic drugs. The pricier, brand name drugs start at Tier 3 and go up. Tier 3 drugs almost always have a deductible that you will pay before coverage begins. If you’re wondering how to determine if a drugs is Tier 3 or not, a good rule of thumb is if you are seeing the drug on TV or in a full-page magazine ad, it’s most likely Tier 3.

 

If you go to Medicare.gov, you can compare drug prices and plans. This can be confusing! I do think it’s great that the government has this comparison tool available, but often the information isn’t quite as up to date as it should be. In order to get the exact prices, you’ll have to go to the website of the insurance company. Once you choose your drug plan for 2024, keep in mind that the drugs covered and the price (tier) of those drugs can be changed by the insurance company with just 30 days notice to you. YOU are locked in to that drug plan for a calendar year, UNLESS you have a spcial exception (like moving). However, the drug companies are not locked into the list of medications and prices you you initially purchased.

 

I’ll say it again! On behalf of insurance agents everywhere: this is not the fault of your agent. We agents have no advance knowledge of any changes to your drug plan. Yet, we take the brunt of complaints. 

If your plan does change you can file a complaint. Dial 1-800 Medicare, but please do not complain against the broker who helped you enroll. We don’t like this system either!