Medicare Part D Standard Benefit or Actuarial Equivalent (2017)

Part D plans must cover at least the Part D standard benefit or its actuarial equivalent. For 2017, the standard benefit requires the beneficiary to pay the following share of total coverage:

  • $400 deductible
  • 25% of prescription drug costs between $400 and $3700 = $825
  • Part of the costs in the “Coverage Gap”:
    • After total spending on drugs by the beneficiary, by certain subsidy programs and by the plan, reaches $3700, the beneficiary pays for 51% of generic-drug costs and 40% of brand-name-drug, undiscounted costs (drug manufacturers provide a 50% discount on brand name drugs).
      • The amount beneficiaries pay while in the coverage gap will decreases by a small percentage each year until 2020 when they will be responsible for only 25% of brand and generic drug costs.
    • Nominal costs under catastrophic coverage: Once beneficiary expenditures (including drug manufacturer discounts) reach a total of $4,950, the beneficiary is through the coverage gap and reaches catastrophic coverage. On any future prescriptions, the beneficiary pays either a co-pay of $3.30 for generic drugs or $8.25 for brand name drugs or a co-insurance of 5%, whichever is greater.

2017_MedicarePartD_StandardBenefit

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