The Four Stages of Medicare Part D
Medicare Part D drug plans have four stages of coverage during each calendar year. During each stage, you are responsible for a portion of your drug costs, depending on which drug plan carrier you choose.
The stages are as follows:
Annual Deductible: You pay the first $405 in drug costs (in 2018)
Initial Coverage Level: You pay a copay or coinsurance amount for each drug, and the plan pays the rest of the cost up until the total costs of your prescriptions filled (including what you have paid AND what the insurance company has paid) has reached $3750.
Coverage Gap (Donut Hole): In 2018, you will pay 35% of the cost of your brand name Part D medications in the coverage gap. You will get a discount on generic drugs as well because you belong to a Medicare drug plan.
Catastrophic Coverage: Once your yearly out-of-pocket drug costs reach $50000 in one calendar year, the coverage gap ends and you enter catastrophic coverage. You then only pay 5% or less for each prescription drug until the end of the year.
Choosing Your Part D Plan
All insurance carriers offering Part D drug plans must include the minimum coverage outlined above. However, many carriers offer richer plans, such as plans that waive the deductible, for an extra premium.
Each carrier also sets it’s own pricing, formulary and copays every year, too, so it’s important to research which plan offers you the lowest out of pocket costs for your specific RX needs. You must also be careful to review your plan’s benefits from year to year. The plan’s benefits, formulary, pharmacy network, premium and/or copayments and coinsurance may change on January 1 each year. This is your opportunity to determine whether your current plan is still the most suitable plan for you for the next year.
There are around 30 standalone Part D drug plans in Texas.
Medicare Part D drug spending is tracked by the carrier you are insured with. If you move to a new county and have to change plans mid-year, the amount you have spent transfers with you to the new carrier and they continue the tracking.
For help understanding your Medicare Part D Prescription Drug Plan options, please fill out our online help request: