2025 and the PDP problems are just around the corner..


100+ Post Club
Part D deductible going from $545 to $590 in 2025. MAPD & PDP plans will be eating lots of the drug costs. This is going to get interesting as in the old Chinese Proverb/Curse "May you live in interesting times." See [page (77) & (82 & 84) of the linked PDF.

Example of PDE re-mapping Below we present a hypothetical example of how reallocating costs to the CY 2025 benefit structure would work for a PDE that had a gross drug cost of $10,000.

For the example below,we will also make the following assumptions:• Current TrOOP spending on other prescriptions: $200• PDE description: Applicable drug with gross drug costs of $10,000• Benefit parameters (under post-IRA benefit structure)o Deductible: $450 OOP threshold: $2,000

Phase 1: Deductible phase Up to the deductible, the beneficiary covers all costs, so there are no costs allocated to the plan:• Beneficiary pays $250 to meet deductible Total TrOOP: $450•

Plan pays $0 Total plan liability: $0• Remaining gross drug costs: $9,750

Phase 2: Initial coverage phase-In the initial coverage phase, the beneficiary is responsible for 25 percent of the remaining gross drug costs, which is $9,750 * 0.25= $2,437.50.

However, the annual OOP threshold is $2,000, at which point the beneficiary would not be responsible for any further cost-sharing.

The beneficiary needs to spend another $1,550 ($2,000-$450=$1,550) in TrOOP to meet the$2,000 annual OOP threshold.

Plan liability is calculated by dividing $1,550 by 0.25 to get the gross drug cost for this phase of the benefit ($6,200) that results in the beneficiary’s 25 percent cost share being $1,550.

This gross drug cost is allocated according to the rules of the initial coverage phase: 25 percent to the beneficiary ($1,550), 65 percent to the plan ($4,030), and 10percent to the manufacturer discount ($620).•

Beneficiary pays $1,550 to meet the annual OOP threshold

Total TrOOP: $2,000• Plan pays $4,030 Total plan liability: $4,030

Manufacturer pays $620• Remaining gross drug costs: $3,550

Phase 3: Catastrophic phase-In the catastrophic phase, beneficiaries pay no cost-sharing. The remaining $3,550 in gross drug
costs are allocated according to the rules of catastrophic coverage: 60 percent goes to the plan($2,130), 20 percent to the manufacturer discount ($710), and 20 percent to Medicare-reinsurance ($710).•

Plan pays $2,130 Total plan liability: $6,160• Manufacturer pays $710• Medicare reinsurance $710• Remaining gross drug costs: $0



Latest posts