What happens after I meet my 2020 Medicare Part D plan's $6,350 TrOOP threshold (total out-of-pocket drug spending limit)?

What happens after I meet my 2020 Medicare Part D plan's $6,350 TrOOP threshold (total out-of-pocket drug spending limit)? You exit the Coverage Gap (or Donut Hole) and enter into the Catastrophic Coverage phase of your Medicare Part D coverage - and remain in Catastrophic Coverage for the remainder of the plan year (until December 31st).

Medicare Part D Catastrophic Coverage is the fourth and final phase of your Medicare Part D prescription drug plan coverage. You reach Catastrophic Coverage after you meet your Medicare Part D prescription drug plan's annual out-of-pocket spending limit (TrOOP). So, once TrOOP is met, you exit the Coverage Gap phase (Donut Hole) and enter the Catastrophic Coverage phase.

Question: Will my drug costs in the Catastrophic Coverage phase depend on my chosen Medicare Part D plan?

Yes. Your Catastrophic Coverage costs are calculated based on your plan's retail drug prices - and retail drug prices can vary plan-to-plan. In the Catastrophic Coverage phase, all Medicare Part D plans use the same cost-sharing structure (you pay the higher of 5% of retail or an annual fixed cost ($3.60 for generics or multi-source preferred drug or $8.95)).

So you may pay more for your drugs in Catastrophic Coverage if your Medicare prescription drug plan has higher negotiated retail drug prices as compared to someone who is in a Medicare Part D plan with lower negotiated drug costs.

In the Catastrophic Coverage phase there are only two (2) cost-sharing tiers and the cost-sharing can change each year (see chart in next section):

generics and preferred brand drugs that are multi-source drugs — In 2020, you will pay the greater of $3.60 OR 5% of the plan's negotiated retail drug cost
all other drugs (such as brand-name, single-source drugs) — In 2020, you will pay the greater of $8.95 OR 5% of the plan's negotiated retail drug cost for medication.

In other words, in 2020, you would be charged $3.60 for those generic or preferred multi-source drugs with a retail price under $72 and 5% of the plan's negotiated retail drug price for those drugs with a retail price greater than $72 and, for all other formulary drugs, you would pay $8.95 for drugs with a retail price under $179 and 5% for those with a retail price over $179.

As a 2020 example, if you are using a brand-name, single-source formulary drug with a retail cost of $100, you would pay $8.95 as a co-pay for the drug in the Catastrophic Coverage phase because... 5% of $100 = $5.00 and since $8.95 is greater than $5.00 - you pay the higher amount. As stated above, the 2020 brand-name drug Catastrophic Coverage cost-sharing is $8.95 or 5% of the retail drug cost, whichever is higher.

Question: Does my Medicare Part D coverage have a maximum out-of-pocket (MOOP) limit?

No. Unfortunately, your Medicare Part D prescription drug coverage does not have a maximum annual spending limit. Your annual out-of-pocket costs for Medicare Part D coverage are theoretically unlimited.

Cost-sharing in the Catastrophic Coverage phase changes slightly year-to-year.

The chart below shows the cost-sharing for the Catastrophic Coverage phase over the past few years. You can 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 (e.g., brand-name)
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

Question: Will I get Catastrophic Coverage for non-formulary drugs?

No. 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 you are prescribed medication that is not covered on your Medicare Part D formulary, you will be responsible for 100% of the drug's cost - even when in the Catastrophic Coverage phase of your Medicare Part D plan coverage.

If you have a non-formulary medication, you may wish to request a formulary exception and ask to have your medication added to your formulary so that it will be covered during all phases of your Medicare Part D coverage.

How your cost-sharing changes in each phase of your Medicare Part D plan coverage.

Here is how example formulary drug purchases are calculated throughout your 2020 Medicare Part D plan (using the CMS defined standard benefit Medicare Part D plan as a guide).

When you purchase a formulary medication with a $100 ($200) retail cost in 2020
Retail Cost	You Pay	Medicare Plan Pays	Pharma Mfgr Pays	Gov. Pays	Amount toward your TrOOP
Initial Deductible	$100	$100	$0	$0	$0	$100
Initial Coverage Phase *	$100	$25	$75	$0	$0	$25
Coverage Gap - brand-name discount **	$100	$25	$5	$70	$0	$95
Coverage Gap - generic discount ***	$100	$25	$75	$0	$0	$25
Catastrophic Coverage (brand drug) ****	$200	$10	$30	$0	$160	n/a
Catastrophic Coverage (generic drug) ****	$100	$5	$15	$0	$80	n/a

* 25% coinsurance or cost-sharing
** 75% Brand-name Donut Hole Discount
*** 75% Generic Donut Hole Discount
**** In 2020, you pay 5% of retail or $8.95 for brand drugs whatever is higher or 5% of retail or $3.60 for generic or multi-source drugs whatever is higher (80% paid by Medicare, 15% paid by Medicare plan, and around 5% by plan member)