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% co-pay 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)