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What happens after I meet my 2019 Medicare Part D plan's $5,100 TrOOP threshold (total out-of-pocket drug spending limit)?


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What happens after I meet my 2019 Medicare Part D plan's $5,100 TrOOP threshold (total out-of-pocket drug spending limit)?
Published on 2018-12-20 20:28:50
Category: Out of Pocket: TrOOP and MOOP


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.

LEP chart


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 ($3.40 for generics or multi-source preferred drug or $8.50 )).

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 2019, you will pay the greater of $3.40 OR 5% of the plan's negotiated retail drug cost

  • all other drugs (such as brand-name, single-source drugs) — In 2019, you will pay the greater of $8.50 OR 5% of the plan's negotiated retail drug cost for medication.
In other words, in 2019, you would be charged $3.40 for those generic or preferred multi-source drugs with a retail price under $68 and 5% of the plan's negotiated retail drug price for those drugs with a retail price greater than $68  and, for all other formulary drugs, you would pay $8.50 for drugs with a retail price under $170 and 5% for those with a retail price over $170.

As a 2019 example, if you are using a brand-name, single-source formulary drug with a retail cost of $100, you would pay $8.50 as a co-pay for the drug in the Catastrophic Coverage phase because ... 5% of $100 = $5.00 and since $8.50 is greater than $5.00 - you pay the higher amount.  As stated above, the 2019 brand-name drug Catastrophic Coverage cost-sharing is $8.50 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)
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 2019 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 2019

 

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

$37

$63

$0

$0

$44

Catastrophic Coverage (brand drug) ****

$200

$10

$30

$0

$160

n/a

Catastrophic Coverage (generic drug) ****

$100

$5

$15

$0

$80

n/a


* 25% co-pay or cost-sharing
** 75% Brand-name Donut Hole Discount
*** 63% Generic Donut Hole Discount
**** In 2019, you pay 5% of retail or $8.50 for brand drugs whatever is higher or 5% of retail or $3.40 for generic or multi-source drugs whatever is higher (80% paid by Medicare, 15% paid by Medicare plan, and around 5% by plan member)


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