Ancillary Health Insurance
Ancillary health insurance coverage can provide an additional layer of protection for those who need it. Unfortunately, most health care plans do not cover every need a client has. Ancillary health products address gaps in coverage and offer additional benefits not included in a primary insurance policy.
Ancillary products include things such as, dental and vision, home health care as well as life products. These plans provide a diverse array of coverage options. Beneficiaries can find coverage options tailored to meet their healthcare needs. In this post we will go over some ancillary health coverage options and why it is a good idea to contract to offer them.
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Dental & Vision Insurance
One of the most requested ancillary health products is dental insurance. Regular dental care, including check-ups, cleanings, fillings, and major procedures such as; root canals and crowns, are not usually covered by standard health plans. In most cases, when these benefits are are included in a Medicare Advantage plan, the coverage is minimum at best. This leaves the client with a huge bill if they require dental care beyond cleanings. Dental insurance can offset the cost of these services, especially when beneficiaries use an in-network provider. Dental coverage makes it possible for individuals to maintain good oral health without financial burdens.
Vision insurance works similar to dental insurance. It covers routine eye care services such as, routine exams, prescription glasses, and contact lenses. Because many individuals need vision correction and regular eye exams to maintain good vision health. Vision insurance makes these services more accessible and affordable.
Long-Term & Short -Term Care Insurance
Long-term care insurance helps cover the costs associated with extended care services, such as nursing home care, assisted living facilities, and in-home healthcare. Medicare Supplement and Medicare Advantage plans provide limited coverage for long-term care, making long-term care insurance essential for individuals concerned about potential future care needs. Long-term care insurance policies vary in coverage options, benefit amounts, and eligibility criteria.
Learn more about short-term vs long-term care coverage
Short-term care insurance is very similar to long-term care in what it covers. The real differences are in the amount of time the policies cover. These policies cover care for a period of 1 year or less depending on the coverage option each beneficiary chooses. It is also much easier to qualify for coverage, there are no waiting periods, and the cost is much more affordable than a long-term care policy.
Cancer, Heart Attack & Stroke Insurance
If an individual is diagnosed with cancer or had a heart attack or a stroke, they already have enough to worry about, they do not need to add paying bills to that list. When it comes to the costs associated with Cancer, Heart Attack and Stroke, insurance that provides coverage for these conditions takes that concern away so beneficiaries can focus on recovery.
Once a beneficiary is diagnosed with any of these conditions, this coverage provides a lump-sum benefit amount. Beneficiaries receive payment in addition to other health coverage you already have. The amount of the benefit depends on the plan purchased and provides a benefit of up to $50,000. More than half the costs incurred with cancer can be non-medical. Patients may need help paying bills if they or a spouse is unable to work. The coverage may also provide financial assistance to receive out of network care with other providers.
Critical Illness Insurance
Critical illness insurance provides a lump-sum payment in the event of a serious illness or medical condition covered by the policy. This coverage helps individuals manage expenses not covered by their primary health insurance, such as lost income, medical bills, and additional caregiving costs. Critical illness insurance offers financial protection and peace of mind during challenging times, allowing individuals to focus on their recovery without financial strain.
If you want to add any of these products to your offerings, click here for online Crowe contract
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Accident Insurance
Because accidents are unpredictable, it is not easy to guess if or when you need the coverage. Accident insurance is beneficial for anyone who lives an active lifestyle which can increase the possibility of an accident. When this happens, you may lose pay due to injury especially if you are not eligible for workers compensation. Accident insurance can help cover costs beneficiaries incur from medical treatments, injuries, hospitalizations, accidental death, dismemberment, or other loss.
Hospital Indemnity
Although accident insurance is a good choice to cover an emergency room visit, hospital indemnity insurance provides another option to cover costs if the beneficiary requires an extended hospital stay or several visits for rehabilitation or other care. Once the beneficiary receives acre, they can submit a claim and, if it is valid, they receive a payment.
Click here to learn more about hospital indemnity plans
Disability Insurance
If a beneficiary is injured and it results in a covered disability, this insurance provides either short-term or long-term protection. The amount of coverage, like other plans depends on what the beneficiary chooses. This coverage gives the beneficiary a way to avoid the financial stress that comes from not being able to work. Beneficiaries may receive weekly payments for three months up to a year, depending on the policy. Get more information on disability insurance and what it covers.
Final Expense Insurance
Due to the high cost of funerals, many people choose to purchase a Final expense plan. This can alleviate at least some of the stress that comes from losing a loved one. A Final Expense plan can provide financial relief for your client’s family. Crowe and Associates’ agents have access to contracts with several top final expense carriers who offer level, graded and guaranteed issue types of plans. in all 50 states. A few of the carriers we are contracted with are: AIG, Foresters, Mutual of Omaha, TransAmerica, Cigna, Baltimore Life, Columbian Life, Royal Neighbors, and Gerber. Learn more about Final Expense plans.
Life Insurance
Although some employers offer life insurance coverage, the benefits usually rely on your employment. In the event a beneficiary loses a job or stops working, they may opt to add a supplemental life plan. There are many choices of life insurance, including term life insurance, whole life insurance and universal life insurance.
There are a wide variety of ancillary coverage options. Each individual has their own needs. A professional insurance agent can provide several options within a client’s budget tailored to supplement primary healthcare coverage. Adding ancillary products is a great way agents can add a steady stream of revenue to their business. Agents can add these products to their existing client’s coverage and both agent and client benefits.
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RetireFlo for Medicare agents is an easy to use service that collects all the information an agent needs to know about their client to help them provide the best plan options. It is important to know, RetireFlo follows all HIPAA guidelines and is a compliant tool.
Here are a few things that RetireFlo offers
- A list of drugs, doctors, hospitals and pharmacies the client uses.
- Permission to contact form.
- 48 hour scope of appointment form
- PDF summaries of any important client data you collect
- This site offers agents the ability to attache custom logos and headshots to your forms
- RetireFlo can integrate the information you collect with Connecture.
Take a look at our RetireFlo video
RetireFlo Pricing
The cost for this truly useful tool is usually $49.99. Crowe agents receive a special discount of 40% off with the promo code “CROWE40”. That come out to only $29.99 per month. Once you see what this tool can do, you will understand what a bargain this is.
Find out what else the Crowe team has to offer! Watch a YouTube video on our agent programs.
Click here to fill out an online contract & join the team at Crowe & Associates
It is so easy to set up ReireFlo
- The first step is to visit RetireFlo.com
- Once you are on the site, click on the big blue “Get Started” button in the center of the page. You will answer 6 short questions about yourself and your agency to create an account. You then have a chance to enter our promo code “CROWE40” (use all caps) to get an amazing 40% discount!
- After you get to your profile, you see “Welcome, (your name)”, select; “Create a Page” and upload your headshot, state license and page references. It is a good idea to enter any social media accounts you have for your business as well as your website’s URL.
- Agents should also enter their business email address in the area that says “Notifications To”, so they receive notifications when a new submission comes in. After you do this, select “Finish & Create”. Now your page is live! It is that easy. You are ready to receive submissions on your own unique RetireFlo survey. New users may want to complete a few practice surveys so they are familiar with how it works.
Learn how Crowe agents can get free help building their own website
Visit the RetireFlo website: www.RetireFlo.com
What can you do from your RetireFlo account
Once you have your profile all set up, you can streamline your next AEP. This form is easy to send to a client and collects all the information you need to run accurate quotes. It also gives valuable insight into what type of products your client may like to discuss. Agents can also use this tool to retain their current clients by staying up-to date on what they want and need from their healthcare coverage.
Watch a YouTube video on what this product can do for you
If you want to take book a one-on-one demo, just click here; RetireFlo.com/Demo
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Although Medicare Advantage and other health insurance plans cover basic medial needs, agents need to understand the gap in these plans and provide additional coverage options to their clients. That is why we offer critical illness insurance to help fill in some of those gaps in coverage. This insurance provides clients much-needed financial protection during difficult times.
What is Critical Illness Insurance
Critical illness insurance provides a lump-sum payment to the policyholder if they receive a diagnosis of one of the illnesses covered by the policy. Unlike health insurance, which provides coverage for medical expenses, critical illness insurance pays out a predetermined sum of money that beneficiaries can use however they want. This lump-sum payment can help cover various costs, including medical bills, living expenses, mortgage payments, and other financial obligations.
If you are a health insurance agent who wants to offer these plans, click here for online contract.
Why is it Important
In today’s world, medical treatments are becoming more and more expensive. Here are a few reasons why having critical illness coverage is important:
- Financial Protection: A critical illness diagnosis can be both emotionally and financially devastating. Even with health insurance, out-of-pocket costs for treatment, lost income, and other expenses can quickly add up. Critical illness insurance provides a financial safety net. This allows individuals to focus on their recovery without worrying about the financial implications.
- Flexibility: Unlike traditional health insurance policies, which only cover certain medical expenses, critical illness insurance provides policyholders a lump-sum payment to use for any purpose. Whether it’s medical bills, replacing lost income, or making modifications to accommodate a disability, policyholders have the flexibility to use the funds as they see fit.
- Peace of Mind: Knowing that you have critical illness coverage can provide peace of mind for you and your family. There is a sense of security knowing you are financially protected in the event of a serious illness. This allows beneficiaries to focus on health and recovery without the added stress of financial worries.
Watch a video on how ancillary product sales can be a great addition to your business
What Does it Cover
The specific illnesses covered by these policies depends on the insurance provider and the terms of the policy. However, most policies typically cover a range of serious illnesses, including but not limited to:
- Heart attack
- Paralysis
- Cancer
- Coronary bypass surgery
- Stroke
- Kidney failure
- Organ transplant
- Heart transplant
- Parkinson’s
- Lou Gehrig’s disease
- Multiple sclerosis
Important; before enrolling anyone in a plan, they should carefully review all terms and conditions of the policy to understand what illnesses are covered and any exclusions that apply.
Want to learn about final expense insurance, click here
Critical illness insurance provides invaluable financial protection in the event of a serious illness, offering peace of mind to the beneficiary.
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One crucial aspect many people overlook when they are planning for the future is disability insurance. Although most people understand the importance of health and life insurance, they often overlook the ability to protect themselves against the risk of disability. We will discuss the importance of disability insurance, what it entails, and why it should be a part of everyone’s financial strategy.
Understanding Disability Insurance
Disability insurance coverage provides financial protection in the event you become disabled and are unable to work. It provides a source of income replacement during the period the beneficiary is disabled. This helps cover essential expenses such as mortgage or rent, utility bills, groceries, and medical costs. Unlike health insurance, which only covers medical expenses, disability insurance provides income replacement for those unable to work due to injury or illness.
In most cases, Disability insurance provides from 40% to 70% of the insured’s pre-disability earnings.. It is important to remember, coverage provided by each policy such as; benefit amounts and duration can vary greatly and depend on the specifics of each individual policy. Some employers offer disability insurance and provide either full or partial payment for the policy.
Why Disability Insurance is important
- Protecting Income: For most people, the ability to earn income is their most valuable financial asset. Disability insurance ensures a beneficiary who is unable to work due to a disability, they can still receive a portion of their income. This provides a safety net to ensure their financial stability.
- Covering Living Expenses: Disability insurance helps cover daily living expenses. This includes mortgage or rent payments, utilities, groceries, and other bills. Without a steady income, it can be a challenge to meet these expenses. This can cause a financial strain or even debt.
- Maintaining a Lifestyle: A disability can significantly impact your lifestyle. It may limit the ability to participate in activities or maintain the standard of living individuals are accustomed to. Disability insurance provides financial support to help maintain quality of life during difficult times.
- Peace of Mind: Knowing there is a financial safety net in place in the event a beneficiary becomes disabled provides peace of mind. It allows them to focus on recovery without worrying about how support their family financially.
If you want to offer these plans to your clients, Click here to learn why you should contract with Crowe
Types of Disability Insurance
There are two types of disability insurance: short-term disability insurance and long-term disability insurance.
- Short-Term Disability Insurance: This coverage typically provides benefits for a short time. Coverage periods range from a few weeks to several months. It offers income replacement for temporary disabilities, such as recovery from surgery or a non-life-threatening illness.
- Long-Term Disability Insurance This insurance provides benefits for an extended period. In some cases, until retirement age, if you’re unable to work due to a severe injury or illness. It provides more comprehensive coverage compared to short-term disability insurance. It is essential to protect against long-lasting disabilities that may prevent you from working for an extended period.
Here are some differences between short-term and long-term insurance:
| Short-term disability | Long-term disability | |
| Benefit period | Coverage may last up to a six months (but this can vary by policy). | Benefits can last for a few years or up to Social Security normal retirement age. |
| Benefit income replacement level | Benefits may replace a higher percentage of your disability income (but this can vary based on the level of coverage). | Benefits may replace a slightly lower percentage of your disability income (this can vary based on the level of coverage). |
| Elimination period | Benefits begin after a shorter period of time after your date of disability (e.g., 14 days being the average). | Benefits begin after a longer period of time (e.g., 90 days being the average) or may begin after short-term disability insurance benefits end. |
| Injuries while working | Typically will not cover claims for injuries that occur while working | Typically will cover claims for injuries that occur while working, however the amount received from any Workers’ Compensation will be deducted from the LTD benefits. |
Click here for a new online contract with Crowe
Things to Consider
When a client is thinking about purchasing disability insurance, there are several factors agents should consider:
- Coverage Amount: Determine how much coverage they need based on monthly income, expenses, and financial obligations. Ensure that the benefit amount is sufficient to cover living expenses and any additional costs related to the disability.
- Waiting Period: The waiting period, also known as the elimination period, is the duration beneficiaries wait before they receive benefits after becoming disabled. Choose a waiting period that aligns with their financial situation and ability to cover expenses during that time.
- Definition of Disability: Pay attention to how the policy defines a disability. Some policies have stricter definitions of a disability. This makes it more difficult to qualify for benefits. It is a good idea to choose a policy with a broader definition of disability. This is a good way to ensure comprehensive coverage.
- Premiums and Cost: It is always important to consider the premium cost is reasonable and within the budget. Compare quotes from different insurance providers to find the most competitive rates and benefits.
Because life is so unpredictable, disability insurance provides clients a sense of security and protection against the unforeseen. It can be a much needed safety net to protect the beneficiaries’ assets from unforeseen circumstances.
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United Healthone Product Availability Sheet
Advantage Guard Hospital Indemnity level 8 commission Schedule
Advantage Guard Hospital Indemnity Level 9 commission Schedule
Advantage Guard Hospital Indemnity Level 10 commission Schedule
Advantage Guard Hospital Indemnity Level 11 commission Schedule
UPDATED 4.4.2024
UPDATED 4.4.2024
Guaranteed Issue Accident Level 11 Comp
Guaranteed Issue Accident Level 20 Comp
Guaranteed Issue Accident Level 45 Comp
24 Hour Accident level 40-52.5 Comp
24 Hour Accident Level 45-55 Comp
24 Hour Accident Level 46-57.5 Comp
24 Hour Accident Level 47-60 Comp
24 Hour Accident Level 50-62.5 Comp
iGAP Guaranteed Issue Accident Level 65 Comp
iGAP Guaranteed Issue Accident Level 70 Comp
Precision Care Cancer Level 30 Comp
Precision Care Cancer Level 40 Comp
Precision Care Cancer Level 45 Comp
Precision Care Cancer Level 50 Comp
Cancer Heart Attack Stroke Level 30 Comp
Cancer Heart Attack Stroke Level 35 Comp
Cancer Heart Attack Stroke Level 40 Comp
Cancer Heart Attack Stroke Level 45 Comp
Cancer Heart Attack Stroke Level 50 Comp
Critical Provider Plus Level 40
Critical Provider Plus Level 45
Critical Provider Plus Level 55
Critical Care Provider Plus Level 60
Critical Care Provider Plus Level 65
All Adv Plus level 80 – Indemnity Plus level 70
All Adv Plus level 65 – Indemnity Plus level 60
All Adv Plus level 70 – Indemnity Plus level 65
Medicare income limits 2024
The Medicare income limits 2024 effect about 7% of Medicare beneficiaries. Each year, the Social Security Administration determines the income limit that the IRMAA is based on. It’s crucial to stay up to date on the annual income limits weather you are an agent or a beneficiary. In this post, we go over Medicare income limits for 2024 and how they can impact beneficiaries.
Why Medicare income limits matter
The income limits come into play with both Medicare Part B & Part D. The limits are used to determine if an individual pays either the standard premium amounts or a higher income-based premium for Part B & Part D.
Beneficiaries who earn more than the Medicare income limit have to pay an IRMAA for their Part B & Part D coverage. In 2024, the income limit is $103,000 for an individual. The income limit is $206,000 per couple.
Which Medicare coverage is income based
Medicare Part A is free to most beneficiaries and no IRMAA applies.
Part B of Medicare is income based as most beneficiaries have to pay for it, with the exception of those who qualify for “Extra Help“.
Learn more about help for Medicare beneficiaries with limited resources.
Beneficiaries of Medicare Part C (Medicare Advantage Plans) only have to pay the IRMAA when the plan they choose includes prescription drug coverage. Few plans called MA only do not include prescription drug coverage and therefore, the IRMAA does not apply to those plans.
The IRMAA does apply to Medicare Part D (PDP) plans.
How is individual income determined
For 2024, the income limit is based on the beneficiaries’ 2022 tax return. In other words, each year the IRMAA is based on the tax return from 2 years prior. Medicare uses the MAGI (modified adjusted gross income) to determine who pays the IRMAA.
Although beneficiaries don’t see this amount on their tax return, they can find it by adding their income after deductions to any tax-free interest they earned.
Agents: Learn more about IRMAAs; watch our YouTube video.
More about income limits in 2024
For 2024, there is more than one income threshold used to determine the IRMAA amount each individual pays for their Part B and Part D coverage. Here are the Part B & Part D IRMAA amounts:
|
Single
|
Married Filing Jointly
|
Married Filing Separately
|
Part B Premium
|
Part D IRMAA
|
|---|---|---|---|---|
|
$103,000 or less
|
$206,000 or less
|
$103,000 or less
|
$174.70
|
$0 + plan premium
|
|
$103,000 up to $129,000
|
$206,000 up to $258,000
|
N/A
|
$244.60
|
$12.90 + plan premium
|
|
$129,000 up to $161,000
|
$258,000 up to $322,000
|
N/A
|
$349.40
|
$33.30 + plan premium
|
|
$161,000 up to $193,000
|
$322,000 up to $386,000
|
N/A
|
$454.20
|
$53.80 + plan premium
|
|
$193,000 less than $500,000
|
$386,000 less than $750,000
|
$103,000 less than $397,000
|
$559.00
|
$74.20 + plan premium
|
|
$500,000 or above
|
$750,000 or more
|
$397,000 or more
|
$594.00
|
$81.00 + plan premium
|
Most people pay the standard Medicare Part B premium rate. The premium rate for Part D varies according to the plan selected. Beneficiaries with higher incomes pay extra for both Part B and Part D.
IRMAAs for Part B and Part D are automatically taken from their Social Security or Railroad Retirement Board benefits. Beneficiaries who do not receive monthly benefit payments receive a bill from Medicare.
How to handle an IRMAA
For beneficiaries subject to an IRMAA for Medicare Part B & Part D, there are ways to potentially lower your MAGI and reduce premiums. Beneficiaries can consult their accountant and or financial advisor to help lower taxable income amounts.
How to request an IRMAA redetermination
Because the Social Security Administration bases their IRMAA determination on income reported on tax returns from 2 years prior, beneficiaries may have had a reduction in income. There are some life events that can cause a reduction in income, these include:
- Death of a spouse, a divorce or annulment or a marriage
- When either spouse stops or reduces the number of hours they work
- If either spouse loses a pension
- Loss of income due to income producing property loss because of a natural disaster, fraud or similar circumstances
When beneficiaries receive notice of an IRMAA, they also receive information that explains how to request a new initial determination.
If Social Security receives a new initial determination, they may revise the amount of the IRMAA or dismiss it all together. Beneficiaries can request a redetermination by either scheduling an appointment with their local Social Security office or by submitting the following form:
Medicare IRMAA Life-Changing Event form
beneficiaries must provide documentation of correct income or life-changing event that affected their income level in a negative way.
Beneficiaries can also call the representatives at SSA +1 800-772-1213 and request help lowering their IRMAA. Explain that Social Security used outdated or incorrect information when calculating the IRMAA.
Short-term vs. long-term care coverage
In this post, we discuss short-term vs long-term care coverage. Most people have heard of long-term care insurance. This coverage pays the cost of care when a beneficiary has a chronic illness, disability, or injury. This coverage also helps individuals who require assistance due to the effects of aging. In general, long-term care insurance helps individuals pay the costs of custodial and personal care. Some people have never heard of short-term care which provides much of the same coverage for a shorter period of time.
Insurance agents, learn how to add ancillary products to your Medicare sales.
Long-term care insurance
Long-term care insurance provides help paying for custodial care for extended periods of time. The coverage this insurance provides is not provided by either Medicare or other health insurance policies.
Long-term care involves a variety of services designed to meet a person’s health or personal care needs when they can no longer perform everyday activities.
The companies that provide this benefit make money by investing the customer premiums they receive. Due to interest rates going down in recent years, these insurance carriers have lower stream of income. They are also losing revenue due to a rising number of beneficiary claims. This has caused a rise in cost and a lessening of benefits for those who wish to purchase a long-term care plan. Companies have also implemented a more difficult pre-qualification process for those who want to purchase coverage.
For most long-term care policy applications, the cutoff age is 79, while the cutoff age for short-term policies is 89. Long-term care policies have an elimination period, which is a specific number of days that the beneficiary pays for care until the policy starts to pay. A common elimination period for the plans to pay is 90 days.
Home-based care
Many individuals receive long-term care at home by either family members, friends, or neighbors. In most instances, home-based care involves help with “activities of daily living” which include bathing, dressing, eating, taking medications, and supervision for personal safety. This care is sometimes supplemented by paid formal caregivers. The professionals that provide these services include nurses, home health aides, and other professional care givers.
Does Medicare home health care.
Community and residential care
Individuals may receive some long-term care services in their community. There are adult day care services or senior center which may be equipped to provide some degree of care including meals, social activities, personal care, activities or transportation.
Residential facilities: assisted living or nursing homes also provide long -term care. Some facilities provide housing and housekeeping only. Others provide personal care, recreational activities, meals, and medical care.
Short-term care insurance
Short-term care insurance is very similar to long -term care in what it covers, Policies typically cover home care, assisted living, and nursing home care for those who cannot care for themselves. Recovery care is another name for short-term care, because it provides coverage for 12 months or less.
In some instances, short-term care insurance is used to cover gaps in Medicare coverage as a less expensive alternative to long-term care. Short-term care insurance is also a good choice to offset some long-term care expenses before long-term care kicks in.
Some benefits of short-term care insurance
Short-term care insurance does not usually have an elimination period; it generally pays benefits immediately. The cost for short-term insurance is less than log-term because it covers the beneficiary for much less time. Coverage options vary from days up to a year.
It’s easier for beneficiaries to qualify for short-term care insurance, there is no medical exam required. Some companies may ask a few yes-or-no questions. For those who are rejected or cannot afford a long-term care policy, short-term policies offer an alternative.
How to choose a coverage option
- Make sure you get quotes from several different insurance companies before you choose one.
- In this situation, it is a good idea to enlist the help of a licensed agent to be sure you get a plan that best meets your needs.
- Have a budget and understand all the out-of-pocket expenses to be sure the plan is budget friendly.
- Read the policy and be sure you understand what is covered and how it is covered.
Agents if you are looking for an FMO, see what Crowe has to offer.
Important: policy coverage differs by state and some coverage options are only available in specific states.
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Medicare donut hole 2025
There are some big changes coming to Medicare Part D (PDP) plans. This includes the discontinuation of the Medicare donut hole 2025. In January 2024, CMS released a draft of the Medicare Part D payment policies.
Starting next year, see what changes are being made to Part D (prescription drug) coverage.
The new design for prescription coverage will consist of three phases of coverage.
- The first phase will be the “Annual Deductible Phase”. In this phase the enrollee pays 100% of their prescription drug cost until they meet the deductible of $590.
- The second phase is the initial coverage or “Standard Coverage Phase”. This phase is the former initial coverage phase merged with the Donut Hole/Gap phase. During this phase. Once the enrollee meets the spending threshold(OOP) of $2,000 for CY 2025, they complete this phase of overage and move into the catastrophic phase.
- The third phase is the catastrophic phase. During this phase of coverage, the enrollee pays no cost sharing for covered Part D drugs.
As you can see, there is no donut hole (coverage gap) phase. It is merged with the “Standard Coverage Phase”.
Find out about the 2025 Medicare Drug cap
The changes in payment liability
This new plan design includes changes in payment liability of enrollees, plan sponsors, drug manufacturers and CMS.
- As stated above, in the first phase “Annual Deductible Phase”, the enrollee must pay 100% of the cost for prescription drugs until the deductible amount is met.
- In the second phase initial coverage “Standard Coverage Phase” enrollees pay 25% coinsurance for covered drugs while the plan sponsor typically pays 65% for applicable drugs and 75% for all other covered Part D drugs. Manufacturers usually pay 10% of the cost through the discount program.
- The third phase “Catastrophic Phase”, enrollees do not pay a cost share for covered Part D drugs. Drug plan sponsors normally pay 60% of the cost on covered drugs. Manufacturers pay a discount of about 20% and CMS pays a subsidy equal to 20% of the cost for applicable drugs. CMS pays about 40% of drug costs for some other Part D drugs.
Click here to learn more about PDP plans
Key points
- Removal of the Donut Hole/Gap phase – Merging together with the former initial coverage phase now the “Standard Coverage Phase”.
- There are now only 3 coverage phases: Deductible, Standard & Catastrophic.
- The Out of Pocket (OOP) threshold is dropping to $2,000 annually.
- The end of the Donut Hole/Gap discount program (CGDP) and the start of the Manufacturer Discount Program (Discount Program)changes what drugs get discounts and how they count towards the OOP. This also changes who is responsible for the cost beyond a set amount.
Watch a YouTube video on Medicare Part D changes
The drug plans will pay similar amounts as in previous years, although a larger part of their responsibility starts much earlier than in previous years. In other words, drug plans will pay more money on more enrollees overall.
Click here to learn all the details of the Medicare Part D redesign
It is expected that the added costs drug companies incur may result in either higher Part D plan premiums or possibly spread across other MAPD plan costs.
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