Prescription drug coverage is available to everyone with Medicare and is only available through private insurance companies. You should join a Medicare drug plan even if you don't take many prescriptions now. If you don’t join a Medicare drug plan when you are first eligible, and you don't have other creditable prescription drug coverage, you'll likely pay a late enrollment penalty when you do sign up.
In this Phase, you pay the plans deductible ($545 is the benchmark or standard) if it has one. The deductible for some plans may be less depending on structure. The deductible for some plans only applies to select tier levels. If your plan has no deductible, your plan starts in the Initial Coverage phase.
In this Phase, you pay for your medication as described by your plan.
Once you and the insurance company, together, spend $5,030, you enter the next phase – The Donut Hole or Coverage Gap.
In the Coverage Gap or “Donut Hole,” you will pay 25% of the plans negotiated prices for generics and 25% for brand drugs. Once you have reached $8,000 in TrOOP Money, you enter the next phase – Catastrophic Coverage.
TrOOP Money = your True Out Of Pocket money spent in the Deductible and Initial Coverage phases and the 70% credit you received in the Donut Hole for the negotiated cost of the drugs. TrOOP costs do NOT include any money spent by the insurance company.
New for 2024!
In the Catastrophic Phase, you will pay $0 for all of your covered medications. You will remain in this phase for the balance of the year. All coverage resets January 1 of each year, no matter when you joined your plan.