May 24, 2019

Medicare Part D Drug Benefit Program Changes for 2020

The Medicare Part D standard benefit design parameters will be higher in 2020, the Centers for Medicare & Medicaid Services (CMS) recently announced.

While the deductible will increase by less than 5 percent, the out-of-pocket threshold will increase dramatically: 24 percent.

The reason for the jump in the out-of-pocket threshold, sometimes known as the TrOOP, is the expiration of a provision of the Affordable Care Act (ACA) that slowed the growth of the TrOOP between 2014 and 2019.

In 2020 and beyond, the TrOOP will be determined using a pre-ACA calculation. Plan sponsors that contract with a Medicare Part D Prescription Drug Plan or Medicare Advantage-Prescription Drug Plan (also known as EGWPs) will likely receive lower payments from CMS as a result of this change, meaning that these plans will be more expensive.

CMS also announced that the Retiree Drug Subsidy (RDS) amounts it pays to sponsors of group health plans that provide prescription drug coverage to Medicare-eligible retirees will be higher in 2020. 

This Update features charts comparing the 2020 numbers to the 2019 numbers.


The Medicare Part D standard benefit design parameters will be higher in 2020, the Centers for Medicare & Medicaid Services (CMS) recently announced.

While the deductible will increase by less than 5 percent, the out-of-pocket threshold will increase dramatically: 24 percent.

The reason for the jump in the out-of-pocket threshold, sometimes known as the TrOOP, is the expiration of a provision of the Affordable Care Act (ACA) that slowed the growth of the TrOOP between 2014 and 2019.

In 2020 and beyond, the TrOOP will be determined using a pre-ACA calculation. Plan sponsors that contract with a Medicare Part D Prescription Drug Plan or Medicare Advantage-Prescription Drug Plan (also known as EGWPs) will likely receive lower payments from CMS as a result of this change, meaning that these plans will be more expensive.

CMS also announced that the Retiree Drug Subsidy (RDS) amounts it pays to sponsors of group health plans that provide prescription drug coverage to Medicare-eligible retirees will be higher in 2020. 

This Update features charts comparing the 2020 numbers to the 2019 numbers.


Comparing the 2020 Numbers to the 2019 Numbers

This Update features charts comparing the 2020 numbers to the 2019 numbers. It looks at the:

  • deductible
  • initial coverage limit for drug expenses paid by the individual and the Part D plan
  • out-of-pocket threshold (TrOOP)
  • Total covered Part D drug spending before catastrophic coverage
  • Minimum copayment in catastrophic coverage portion of benefit for generic/preferred multi-source drugs
  • Copayment in catastrophic coverage portion of benefit for other drugs.

Questions? Contact Us

For more information about how the 2020 changes to the Medicare Part D program may affect your plan, get in touch.

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