Part D Coverage Gap And Catastrophic Coverage
By Robert Remin
Whether you have an Advantage or Supplement/Medigap plan, your Part D Prescription Drugs are subject to reaching The Donut Hole and possibly the next step, which is called Catastrophic Coverage. These are out-of-pocket drug cost levels that, once you exceed them, you are eligible to receive discounts on your future drug costs.
What Is The Donut Hole?
The best way to think of the Medicare Donut Hole is to think of it as your first stage to a possible maximum expense (called TrOOP–True Out Of Pocket) for your prescription drugs each year.
In 2018, the Donut Hole kicks in when your prescription drugs have reached $3,750 for the year based on their retail cost, not your copays. The good news is that if you reach the Donut Hole, you actually receive a discount on your prescription drugs, though the percentage discount depends on whether your drugs are generic or brand name, so the specific savings may vary.
Once in the Donut Hole, you continue paying your share based on the discounts you receive and an additional percentage credit of the retail price of the drug you are taking until you hit the 2018 TrOOP cost of $5,000. Once you exceed this limit, you are in the Catastrophic Coverage Phase, where your drugs cost no more than $8.35 per month.
These programs are designed to give a little bit of relief for Medicare patients who have high drug costs. But there are many other details to this program that won’t fit on this page.
The Simplified Recipe
The Donut Hole
And Catastrophic Coverage
I’m not going to get into the nitty gritty of all these numbers because, as I’ve mentioned in my previous articles, all it does is confuse the Medicare-eligible population even more. I know some people with MBAs who have studied the Medicare language only to end up more frustrated and confused than when they started.
Basically, if your drugs retail for about $313 per month in 2018, you will enter the Donut Hole. And, if they retail for about $702 per month, you will enter the Catastrophic Coverage Phase.
What you pay for your drugs each month depends on your carrier, as each has their own drug tiers and formulary, like I wrote in last week’s article.
In order to save yourself time and frustration, your most appropriate choice is to work with an independent agent familiar with all of the plans available in your area. Only they know all of the options available, how these plans can fit into your overall financial plan, and your goals.
Robert Remin is an independent agent licensed and certified with all the Medicare carriers in the New York Metro area. As an unbiased resource, his only goal is to match you to the most appropriate plan. For any questions or a cost free consultation, contact him at 914-629-1753 or RobertReminInsurance@gmail.com, or visit RobertReminInsurance.com. He is also available for speaking engagements at synagogues or other organizations to educate Medicare-eligible populations.