What happens after the 2014 Out of Pocket Threshold (True Out of Pocket Cost or TrOOP limit) of $4,550 has been met?

This phase of your Medicare Part D coverage is called the Catastrophic Coverage phase and has the same cost-sharing for every Medicare Part D plan.

For generics or preferred brand drugs that are multi-source drugs, the beneficiary pays the greater of $2.55 OR 5% of the plan's negotiated retail drug cost for medication.

For all other drugs, the beneficiary pays the greater of $6.35 OR 5% of the plan's negotiated retail drug cost for medication.

In 2014, beneficiaries would be charged $2.55 for those generic or preferred multi-source drugs with a retail price under $51 and 5% of the plan's negotiated retail drug price for those drugs with a retail price greater than $51. And for all other drugs, beneficiaries would pay $6.35 for those drugs with a retail price under $127 and 5% for those with a retail price over $127.

Please keep in mind that the Catastrophic Coverage phase cost-sharing only applies to medications that are on your Part D plan's formulary (drug list). Therefore, if someone is taking an expensive medication that is not covered on their Medicare Part D formulary, they will be responsible for 100% of the drug's cost even when in the Catastrophic Coverage portion of their Medicare Part D Plan. They may wish to file for a formulary exception to have the drug added to their formulary so that it will be covered during all phases of their Medicare Part D coverage.

Click here to see a chart comparison of Medicare Part D plan parameters for all years since 2006

See Catastrophic Coverage examples for other years