A 2017 Straddle Claim moving from your Medicare Part D plan's Initial Coverage Phase and into the Donut Hole
Straddle Claims and high costs · published May 12, 2017
Your discount is only on the portion that falls into the Gap. You pay your cost-sharing for
the Initial Coverage Phase and you get a discount on the portion of the purchase that "straddles" or falls into the Donut Hole. Therefore, your actual cost for the medication is the cost-sharing you paid in the Initial Coverage Phase combined with the discounted cost from the Gap - however, the combined cost will never exceed your drugs retail cost. Please see the example below for more information.
A note on Straddle Claims
When your formulary drug purchase crosses between two "phases" of your Medicare Part D plan coverage, you have a "Straddle Claim" (the purchase "straddles" two or more coverage areas at one time) and your coverage cost is split between the two (or more) phases. In this case, the drug purchase straddles the Initial Coverage Phase and the Coverage Gap.
Example of Straddle Claim entering the Donut Hole
In this example, if your plan has a $30 co-pay on your brand-name drug in your Initial Coverage (IC) phase, your cost-sharing for this purchase would be $66 = $30(IC) + $36(DH). So, you would pay an IC cost-sharing of $30 on the $310 portion of the brand-name retail drug cost that falls into the Initial Coverage Phase (before reaching $3,700) and you will pay $36 ($90 x 0.40) cost-sharing on the $90 that falls into Donut Hole or Coverage Gap with the Donut Hole discount is applied.
Click here for an example of a Medicare prescription drug plan providing additional or supplemental Gap coverage for Donut Hole purchases.
Part 1 - The Initial Coverage Phase
The first portion of your purchase will fall in your Initial Coverage Phase until you have met the $3,700 limit for 2017 (or whatever your Medicare plan provides). So you will pay a co-payment or co-insurance for the first $310 of the $400 retail cost - depending on your plan design (for example, you might pay a $60 Tier 3 co-pay or 25% co-insurance).
Part 2 - The Coverage Gap or Donut Hole
The remaining balance of the retail price ($90) will receive the brand-name Donut Hole discount of 60% (you pay 40% of the remaining retail price) or the Donut Hole discount for generics of 49% (you pay 51% of the remaining retail price) - depending on the type of medication you are purchasing.
The good news is, even with Straddle Claims, you always will have a savings over the retail drug cost.
The Straddle Claim math (with assumptions):
Initial Coverage Phase: Assuming you have a $60 co-pay for the remaining $310 portion of your brand-name drug's $400 retail cost. Your cost in the Initial Coverage Phase: $60.00
Coverage Gap Phase: You will receive a 60% Donut Hole discount for the remaining $90 portion of your brand-name drug's $400 retail cost. Your additional cost in the Donut Hole: $36
(Plus you get $81 (90% of $90) credit toward meeting your $4,950 TrOOP - you pay 40%, but get credit for the 40% paid plus the 50% discount paid by the brand name drug manufacturer.)
Total cost estimate: $60 + $36 = $96 for a $400 brand-name drug Straddle Claim