2019 Medicare Part D Costs Explained
All Medicare Part D Plans (PDPs) have four coverage phases, starting with the initial deductible and ending with catastrophic coverage. What follows is what you need to know about each phase and how they help cover your prescriptions.
Initial Deductible: $0 to $415. This is the first phase of all Part D plans. You are responsible for 100% of your prescription costs until the deductible amount is reached.
Initial Coverage Limit (ICL): $3,820. The second phase of a Part D plan is the ICL. This is calculated by the total retail value of your prescriptions. Once you have reach the ICL you start the third phase of your plan, the "Coverage Gap".
Coverage Gap (Donut Hole): The third phase is the Coverage Gap. Itbegins once you reach the initial coverage limit and ends when you spend a total of $5,100 (retail cost). This is known as the Out-of-Pocket Threshold or TrOOP
Coverage Gap Discount: Part D plan enrollees receive a 75% discount on the total cost of their brand-name drugs purchased while in the Coverage Gap (aka, "Donut Hole"). The discount includes, a 70% discount paid by the brand-name drug manufacturer and a 5% discount paid by your the Part D plan.
The 70% discount plus the 25% you pay, count toward your TrOOP (exit point). For instance, if you reach the Donut Hole and buy a brand-name prescription medication with a retail cost of $100, you will pay $25 for the medication, and receive $95 credit toward meeting your total out-of-pocket spending limit.
Medicare Part D members who go into the Coverage Gap will also pay a maximum of 37% co-pay on generic drugs purchased while in the Donut Hole (63% discount). For instance, if your generic medication has a retail cost of $100, you will pay $37. The $37 that you spend will count toward your TrOOP or Coverage Gap exit point.
Catastrophic Coverage: If your TrOOP reaches $5,100, you will receive Catastrophic Coverage benefits. In this phase you must pay a minimum cost-sharing amount. Your cost will be the greater of 5% or $3.40 for generic or a preferred, multi-source drug and the greater of 5% or $8.50 for all other drugs.
Low Income Full Subsidy Eligible Enrollees: Members who qualify for LIS have a maximum co-payment amount on their prescriptions. Qualified members pay a maximum of $3.40 for generic or preferred, multi-source drugs and $8.50 for all other drugs.
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