A non-government resource for the Medicare community
Powered by Q1Group LLC
A non-government Medicare community resource
  • Menu
  • Home
  • Contact
  • MAPD
  • PDP
  • 2024
  • 2025
  • FAQs
  • Articles
  • Search
  • Contact
  • 2024
  • 2025
  • FAQs
  • Articles
  • Latest Medicare News
  • Search

Straddle Claim example of going from your Initial Coverage Phase into the 2012 Donut Hole

Category: Straddle Claims and High Costs
Published: Mar, 25 2012 03:03:16


If you are using a formulary prescription drug that has a $1,894 retail cost and, since the start of 2012, you have already purchased medications with a total retail cost of $930, your purchase will push you over your Medicare Part D prescription drug plan's Initial Coverage Limit of $2,600 (that is your total retail drug purchases for 2012 will now be $2,824).  So that question is, will you pay the full retail price for your medications?

No.  Your present $1,894 drug purchase is calculated as a Straddle Claim and should cost you around $680.20.

In your situation, you will pay your initial co-payment (or cost sharing) for the $1,894 drug plus the difference of the retail amount that takes you into your Medicare Part D plan's Donut Hole or Coverage Gap - less any applicable Donut Hole Discount applied to the balance of the purchase that falls into the Donut Hole.

So, a prescription drug purchase that would exceed your Medicare prescription drug plan's $2,600 Initial Coverage Limit and then crosses into the Coverage Gap or Donut Hole portion of your Medicare Part D plan is known as a "straddle claim" because it will cross to different phases of your Medicare Part D coverage.

Here is how we can estimate your straddle claim cost at the pharmacy:
  • Current Amount in Initial Coverage Phase: $930
  • You Plan's Initial Coverage Limit: $2,600
  • What you have remaining before reaching the Donut Hole or Coverage Gap Phase: $1,670
  • Your Drug Purchase of: $1,894
  • Your Medicare Part D plan's Cost-Sharing Amount for this purchase (30% of the retail cost as co-insurance): $568.20
In this example, the first $1,670 of your $1,894.70 drug purchase will still be in your Initial Coverage Phase and you will be charged only your normal Medicare Part D plan co-payment (30%) for the first $1,670 portion of the purchase - or $568.20.

The second portion of your purchase, the remaining $224, falls into the Coverage Gap or Donut Hole and you will receive a 50% discount (in 2012) on this part of the purchase (or $112), assuming the purchase is for a name-brand medication.

So - your entire purchase would then cost you around: the co-insurance of $568.20 + the discounted remainder of $112 = $680.20.

Please note that, since this purchase was for a name-brand medication, you would get full credit for the $224 Donut Hole portion of the purchase toward exiting the Donut Hole (or your TrOOP limit ($4,700 in 2012).

Anytime you figure a Straddle Claim, please realize that the total is only an estimate as retail drug prices can fluctuate throughout your Medicare plan year.

Finally, no matter how you calculate a Straddle Claim, you will never pay more than the retail price for your medications and your monthly Explanation of Benefits letter that you are sent by your Medicare Part D plan will show you how the purchase was allocated within the phases of your plan.

Click here if you wish to see the other Medicare Part D plan standard defined plan parameters for 2012:  https://q1medicare.com/PartD-The-2012-Medicare-Part-D-Outlook.php

Click here if you wish to see how the Donut Hole Discount changes until 2020: https://q1medicare.com/faq/FAQ.php?faq_id=470 







Tips & Disclaimers
  • Q1Medicare®, Q1Rx®, and Q1Group® are registered Service Marks of Q1Group LLC and may not be used in any advertising, publicity, or for commercial purposes without the express authorization of Q1Group.
  • The Medicare Advantage and Medicare Part D prescription drug plan data on our site comes directly from Medicare and is subject to change.
  • Medicare has neither reviewed nor endorsed the information on our site.
  • We provide our Q1Medicare.com site for educational purposes and strive to present unbiased and accurate information. However, Q1Medicare is not intended as a substitute for your lawyer, doctor, healthcare provider, financial advisor, or pharmacist. For more information on your Medicare coverage, please be sure to seek legal, medical, pharmaceutical, or financial advice from a licensed professional or telephone Medicare at 1-800-633-4227.
  • We are an independent education, research, and technology company. We are not affiliated with any Medicare plan, plan carrier, healthcare provider, or insurance company. We are not compensated for Medicare plan enrollments. We do not sell leads or share your personal information.
  • Benefits, formulary, pharmacy network, provider network, premium and/or co-payments/co-insurance may change on January 1 of each year. Our PDPCompare.com and MACompare.com provide highlights of annual plan benefit changes.
  • The benefit information provided is a brief summary, not a complete description of benefits. For more information contact the plan.
  • Limitations, copayments, and restrictions may apply.
  • We make every effort to show all available Medicare Part D or Medicare Advantage plans in your service area. However, since our data is provided by Medicare, it is possible that this may not be a complete listing of plans available in your service area. For a complete listing please contact 1-800-MEDICARE (TTY users should call 1-877-486-2048), 24 hours a day/7 days a week or consult www.medicare.gov.
    Statement required by Medicare:
    "We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options."
  • When enrolling in a Medicare Advantage plan, you must continue to pay your Medicare Part B premium.
  • Medicare beneficiaries with higher incomes may be required to pay both a Medicare Part B and Medicare Part D Income Related Monthly Adjustment Amount (IRMAA). Read more on IRMAA.
  • Medicare Advantage plans that include prescription drug coverage (MAPDs) are considered Medicare Part D plans and members with higher incomes may be subject to the Medicare Part D Income Related Monthly Adjustment Amount (IRMAA), just as members in stand-alone Part D plans. In certain situations, you can appeal IRMAA.
  • You must be enrolled in both Medicare Part A and Part B to enroll in a Medicare Advantage plan. Members may enroll in a Medicare Advantage plan only during specific times of the year. Contact the Medicare plan for more information.
  • If you are enrolled in a Medicare plan with Part D prescription drug coverage, you may be eligible for financial Extra Help to assist with the payment of your prescription drug premiums and drug purchases. To see if you qualify for Extra Help, call: 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048, 24 hours a day/ 7 days a week or consult www.medicare.gov; the Social Security Office at 1-800-772-1213 between 7 a.m. and 7 p.m., Monday through Friday. TTY users should call, 1-800-325-0778; or your state Medicaid Office.
  • Medicare evaluates plans based on a 5-Star rating system. Star Ratings are calculated each year and may change from one year to the next.
  • A Medicare Advantage Private Fee-for-Service plan (PFFS) is not a Medicare supplement plan. Providers who do not contract with the plan are not required to see you except in an emergency.
  • Disclaimer for Institutional Special Needs Plan (SNP): This plan is available to anyone with Medicare who meets the Skilled Nursing Facility (SNF) level of care and resides in a nursing home.
  • Disclaimer for Dual Eligible (Medicare/Medicaid) Special Needs Plan (SNP): This plan is available to anyone who has both Medical Assistance from the State and Medicare. Premiums, co-pays, co-insurance, and deductibles may vary based on the level of Extra Help you receive. Please contact the plan for further details.
  • Disclaimer for Chronic Condition Special Needs Plan (SNP): This plan is available to anyone with Medicare who has been diagnosed with the plan specific Chronic Condition.
  • Medicare MSA Plans combine a high deductible Medicare Advantage Plan and a trust or custodial savings account (as defined and/or approved by the IRS). The plan deposits money from Medicare into the account. You can use this money to pay for your health care costs, but only Medicare-covered expenses count toward your deductible. The amount deposited is usually less than your deductible amount, so you generally have to pay out-of-pocket before your coverage begins.
  • Medicare MSA Plans do not cover prescription drugs. If you join a Medicare MSA Plan, you can also join any separate (stand-alone) Medicare Part D prescription drug plan
  • There are additional restrictions to join an MSA plan, and enrollment is generally for a full calendar year unless you meet certain exceptions. Those who disenroll during the calendar year will owe a portion of the account deposit back to the plan. Contact the plan provider for additional information.
  • Medicare beneficiaries may enroll through the CMS Medicare Online Enrollment Center located at www.medicare.gov.
  • Medicare beneficiaries can file a complaint with the Centers for Medicare & Medicaid Services by calling 1-800-MEDICARE 24 hours a day/7 days or using the medicare.gov site. Beneficiaries can appoint a representative by submitting CMS Form-1696.