Click here to access the full Announcement from CMS on April 1, 2019.
Click here to access 2020 Medicare Advantage Ratebook details via CMS’ website.
Medicare Part D is a federal program that subsidizes the cost of prescription drugs for Medicare beneficiaries in the United States.
The Medicare Modernization Act (MMA) imposes a late enrollment penalty on individuals who do not maintain Creditable Coverage for a period of 63 days or longer following their initial enrollment period of Medicare prescription drug benefit.
- For coverage to be “creditable”, its actuarial value must equal or exceed the actuarial value of defined standard Medicare Part D coverage under CMS guidelines. Please review values from 2018-2020 in the table below.
- “Actuarial value” measures whether the employer’s coverage is, on average, at least as good as standard Medicare prescription drug coverage; if it is, the employer’s coverage is creditable.[1]
- MMA mandates that employer health plan sponsors disclose to all Medicare eligible individuals with prescription drug coverage under the plan whether such coverage is creditable as the standard health benefit under Medicare Part D.
- A Disclosure Notice with information about prescription drug coverage and Medicare Part D must be distributed to Medicare eligible individuals by October 15 of each year, when he/she joins the plan, and whether the drug benefits offered under the plan changed.
- Plans must send a disclosure notice of this determination to the Centers for Medicare and Medicaid Services (CMS) within 60 days after the beginning date of the plan year for which the disclosure is provided.
Parameters used by group health plan sponsors to determine whether their plans’ prescription drug coverage is creditable |
2020 |
2019 |
2018 |
Deductible |
$435 |
$415 |
$405 |
Initial Coverage Limit |
$4,020 |
$3,820 |
$3,750 |
Out-of-Pocket Threshold |
$6,350 |
$5,100 |
$5,000 |
Total covered Part D spending at the out-of-pocket expense threshold for beneficiaries who are not eligible for the coverage gap discount program |
$9,038.75 |
$7,653.75 |
$7,508.75 |
Estimated total covered Part D spending at the out-of-pocket expense threshold for beneficiaries who are eligible for the coverage gap discount program |
$9,719.38 |
$8,139.54 |
$8,417.60 |
Minimum cost-sharing under the catastrophic coverage portion of the benefit for generic/preferred multi-source drugs |
$3.60 |
$3.40 |
$3.35 |
Minimum cost-sharing under the catastrophic coverage portion of the benefit for all other drugs |
$8.95 |
$8.50 |
$8.35 |
[1] Checkpoint, Thomson Reuters, (2019).