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Will my Catastrophic Coverage drug costs change over the years?

Category: Catastrophic Coverage
Updated: Aug, 16 2023


In the past, yes, but not in the future.  In the past, Catastrophic Coverage drug costs increased year-to-year -- but cost-sharing in the Catastrophic Coverage phase will end December 31, 2023.

In the 2023 Catastrophic Coverage phase, you will pay the greater of either 5% of the formulary drug's negotiated retail price - or a fixed copay (that changed annually) depending on the type of drug -- generics and preferred brand drugs that are multi-source drugs or all other drugs.  For example, in 2023, you pay the higher of either 5% of retail prices or $10.35 for brands or $4.15 for generics in Catastrophic Coverage.

But 2023 is the last year that Medicare Part D beneficiaries will pay cost-sharing in the Catastrophic Coverage phase.  For plan year 2024 and beyond, the Inflation Reduction Act (IRA) of 2022 eliminates beneficiary cost-sharing in the Catastrophic Coverage phase.

The chart below shows the fixed cost-sharing for the Catastrophic Coverage phase over the past years.  As noted, you pay the greater of the annual copay (for brands or generics) or 5% of the formulary drug's negotiated retail price - so, as retail drug prices increase, so also can your Catastrophic Coverage costs increase.


For example in 2023, if you are using a brand-name drug with a retail cost of $100, your coverage cost in the Catastrophic Coverage phase would be $10.35 (since $10.35 is greater than $5 - or 5% of $100).  But, if you were using a brand drug that now has a $400 retail cost you would pay $20 (since $20 - or 5% of $400 is greater than the standard 2023 copay of $10.35).

Click the plan year to see examples and more details for a specific year or click here to see a chart of Medicare Part D plan parameters for all years since 2006

Catastrophic Coverage Phase Cost-Sharing
Plan Year TrOOP Generics or
Preferred Brand Drugs
that are Multi-Source Drugs
All Other Drugs
2024 $8,000 not applicable not applicable
2023 $7,400 $4.15 $10.35
2022 $7,050 $3.95 $9.85
2021 $6,550 $3.70 $9.20
2020 $6,350 $3.60 $8.95
2019 $5,100 $3.40 $8.50
2018 $5,000 $3.35 $8.35
2017 $4,950 $3.30 $8.25
2016 $4,850 $2.95 $7.40
2015 $4,700 $2.65 $6.60
2014 $4,550 $2.55 $6.35
2013 $4,750 $2.65 $6.60






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