Yes. You can estimate if - or when - you will enter
Catastrophic Coverage based on your average monthly retail drug cost (only the retail price for your formulary drugs).
For example, a person will exit the 2024 Donut Hole if their medication purchases average a
total retail cost of over $1,038 per month. They will then enter the Catastrophic
Coverage phase - the higher your average monthly retail drug costs, the faster
you will enter Catastrophic Coverage.
But, since your Medicare Part D plan changes every year, your spending and timing of when (or if) you enter Catastrophic Coverage can also change -- keep in mind that 2023 was the last year that Medicare Part D
beneficiaries paid cost-sharing in the Catastrophic Coverage phase.
For plan year
2024 and beyond, the
Inflation Reduction Act (IRA) of 2022 eliminated beneficiary cost-sharing in the Catastrophic Coverage phase.
As an example, if you are using a
Medicare Part D formulary drug
with a high retail price (assume $6,000), you would expect to enter the
Catastrophic Coverage phase in early to mid-February of 2023.
In the Catastrophic Coverage phase for plan year 2024 and beyond, you will pay nothing for your formulary drug purchases through the end of the year. Prior to 2024, you paid the greater of either 5%
of the formulary drug's retail price or a fixed copay
(that was set annually) depending on the type of drug -- generics and
preferred brand drugs that are multi-source drugs or all other
brand-name drugs. So, in this example, for a $6,000 drug, you would pay
5% of $6,000 or $300 per prescription for the remainder of the year.
Reminder: Usually, we estimate when you
enter Catastrophic Coverage based on your total out-of-pocket spending (
TrOOP),
but in this FAQ, we are estimating your retail drug purchases necessary
to meet your TrOOP. In other words, after you spend over
$8,000 out-of-pocket in 2024, you will meet your Medicare Part D prescription drug plan's out-of-pocket spending limit (TrOOP), exit the
Coverage Gap or Donut Hole phase
of your Medicare drug plan coverage, and enter the Catastrophic Coverage phase - and based on
annual Part D plan parameters and past purchases of generic and brand drugs, we can estimate the retail drug costs necessary to meet your annual TrOOP.