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Can I choose a Medicare Part D plan with better Catastrophic Coverage?

No, but you can choose a plan with lower retail drug prices.  Catastrophic Coverage cost-sharing is the same for all Medicare Part D plans - but, Medicare plans will have different retail drug prices that can affect your drug costs in the Catastrophic Coverage phase.

In the Catastrophic Coverage phase, you will pay the greater of a flat fee (set annually) of 5% of the plan's negotiated retail drug cost for your formulary medications, depending on the type of drug -- generics or preferred brand drugs that are multi-source drugs vs. all other drugs.

For example, in 2021, you pay the higher of either 5% of retail prices or $9.20 for brands or $3.70 for generics in Catastrophic Coverage.  And in in 2022, you pay the higher of either 5% of retail prices or $9.85 for brands or $3.95 for generics in Catastrophic Coverage.

So if you are using a single-source, brand drug with a $100 retail price, you would pay $9.20 since the fixed co-pay of $9.20 is more than (5% of $100) or $5.  If another plan has a $150 retail cost, you would still pay $9.20 since this is still higher than (5% of $150) or $7.50.  In this case retail cost does not affect your fixed Catastrophic Coverage cost.

However, for an example of a higher-costing drug: if "Medicare Part D Plan AAA" has a retail cost for Drug X of $400, you would pay $20 in the Catastrophic Coverage phase.  But if "Medicare Part D Plan BBB" has a retail cost for the same Drug X of $500, you would pay $25 - or $5 more than the cost with Medicare Part D Plan AAA.

As a real-life example, a popular Medicare Part D drug with a high retail price (assume $6,000), might cost 33% of retail during the Initial Coverage Phase (about $1,980), 25% of retail in the Coverage Gap or Donut Hole ($1,500), and 5% of retail in Catastrophic Coverage ($300).  If the retail cost of the medication for another Medicare Part D plan was $7,000, then you would pay $350 in Catastrophic Coverage.

Medicare Part D drug with high retail cost

As noted, if you reach the Catastrophic Coverage phase, you will find that your Medicare Part D Catastrophic Coverage phase has the same cost-sharing structure as every other Medicare Part D plan.  However, your actual drug cost in this phase can vary between drug plans since your costs are based on your Medicare Part D plan's negotiated retail drug price - and retail drug prices can vary between Medicare Part D prescription drug plans.

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