Reminder: Your total out-of-pocket spending includes what you pay and what others may spend on your behalf toward your drugs - so, at this time**, your TrOOP will include the brand-name pharmaceutical manufactures' portion of the Donut Hole Discount (70% of your brand-name drug retail costs).
Your TrOOP also includes any payments made by:
- Family members or friends,
- Qualified State Pharmacy Assistance Programs (SPAPs),
- Medicare’s Extra Help (low-income subsidy),
- Most charities (unless they’re established, run, or controlled by the person’s current or former employer or union or by a drug manufacturer’s Patient Assistance Program [PAP] operating outside Part D),
- Indian Health Service (IHS),
- AIDS Drug Assistance Programs."
Important: Starting in 2024 - no additional costs for formulary Medicare Part D drugs once a person reaches Catastrophic Coverage.
Based on the Inflation Reduction Act, 2024 Medicare Part D Catastrophic Coverage will remain the fourth and final part of your Medicare Part D prescription drug plan coverage - however - cost-sharing for formulary drugs purchased in the Catastrophic Coverage phase will be eliminated for all Medicare beneficiaries - through the remainder of the year.
Important: Starting in 2025 - the Donut Hole is eliminated and the plan member has no additional costs for formulary Medicare Part D drugs once the person leaves the Initial Coverage phase and reaches Catastrophic Coverage.
- If you have a brand-name formulary drug with a retail cost of
$100 and you have a $30 copay for the drug before entering the 2024 Donut
Hole, the $100 retail cost will count toward your plan's Initial
Coverage Limit and entering the Donut Hole.
- The $30 copay would count toward your TrOOP (total drug spending) and exiting the Donut Hole.
- Once in the Donut Hole or Coverage Gap, you would get a
brand-name Donut Hole discount of 75% (you pay $25). So, in this
example, you pay $25 of the $100 retail price.
- You get a $95 credit toward TrOOP (the $25 you spent plus the 70% discount from the brand-name drug manufacturer).
This proposal was NOT enacted. If it had been enacted, you would pay $25 for a brand-name formulary drug with a retail cost of $100 and receive credit for only what you spent ($25) toward meeting your TrOOP threshold and exiting the Donut Hole - you would not receive credit for the 70% discount of the retail drug costs paid by the pharmaceutical industry toward meeting your TrOOP. Question: What part of my Medicare Part D drug plan costs do not count toward my Medicare Part D coverage?
A number of costs associated with your Medicare Part D plan do not count toward entering or - exiting the 2024 Donut Hole:
- Premiums. Your monthly prescription drug plan premiums
do not count toward your Coverage Gap or Donut Hole. So, if you spend
$50 per month on plan premiums, this $50 does not impact your Donut
Hole. Likewise, any late-enrollment penalty
payment that you make in addition to your monthly premiums does not
count toward the Donut Hole. If you are a higher-earning Medicare
beneficiary, your Medicare Part D Income Related Monthly Adjustment
Amount (IRMAA) is also not counted toward entering or exiting the Donut Hole.
- Non-Part D Drug Purchases. Any medications or drugs
that are purchased "outside" of your Medicare prescription drug plan do
not count toward the Donut Hole - that is, you purchase a formulary drug
without showing your Medicare Part D Member ID - or when you purchase a
formulary drug at a non-network pharmacy. For instance, if you
purchase a prescription that is normally covered by your Medicare Part D
plan and forget to use your Part D plan, you will pay full retail cost
for the drug and the purchase will not be counted toward entering or
exiting the Donut Hole. (Please note, in some instances, such as when
no network pharmacy is available, you can purchase your medications at a
non-network pharmacy, pay full retail price, and then ask your Medicare
prescription drug plan how you can submit the claim for reimbursement.)
- Drugs Purchased Outside the U.S. Any medication that
you purchase outside of the United States does not count toward the
Donut Hole. So, if you travel to Cancun, Mexico and purchase a
formulary drug, the medication costs do not count toward entering or
exiting the Donut Hole.
- Non-Formulary Drugs. Any medications not covered by
your Medicare prescription drug plan (non-formulary prescriptions) also
do not count toward your Donut Hole.
- Bonus Drugs. Non-Medicare Part D drugs covered by your
Medicare drug plan are not counted toward your Donut Hole. For example,
some Medicare Part D prescription drug plans with enhanced
features provide supplemental coverage for excluded drugs as "bonus
drugs" or "supplemental drugs", but these bonus drugs will not
count toward the Coverage Gap or
Donut Hole.
- Excluded Drugs. Any purchases of drugs specifically excluded by the Medicare Part D program are not counted toward the Donut Hole. For instance:
- Drugs used to treat anorexia, weight loss, or weight gain;
- Drugs used to promote fertility;
- Drugs used for cosmetic purposes or hair growth;
- Drugs used to treat cold symptoms or coughs;
- Prescription vitamins and mineral products (except prenatal vitamins and fluoride preparations);
- Over-the-counter (OTC) or non-prescription drugs;
- Drugs used to treat sexual or erectile dysfunction