You can estimate if - or when - you will enter Catastrophic Coverage
based on your average monthly retail drug cost (only the retail price for your formulary drugs).
For example, if you are using formulary drugs with a retail cost of about $838 in 2021, you will probably exit the Donut Hole or Coverage Gap and enter the Catastrophic Coverage phase.
But, since your Medicare Part D plan will change every year, your spending or timing when (or if) you enter Catastrophic Coverage can also change.
For example, you will spend slightly more per month in 2022 before reaching your out-of-pocket spending limit and exiting the 2022 Donut Hole. So, in general, a person will exit the 2022 Donut Hole if their medication purchases average a total retail cost of over $891 per month enter enter Catastrophic Coverage - the higher your average monthly retail drug costs, the faster you will enter Catastrophic Coverage.
As an example, if you are using a Medicare Part D formulary drug
with a high retail price (assume $6,000), you would expect to enter the Catastrophic Coverage phase in early to mid-February of 2021 or 2022.
the Catastrophic Coverage phase, you will pay the greater of either 5% of the formulary drug's retail price or a fixed co-pay
(that is set annually) depending on the type of drug -- generics and
preferred brand drugs that are multi-source drugs or all other brand-name drugs. So, in this example, for a $6,000 drug, you would pay 5% of $6,000 or $300 per prescription for the remainder of the year.
Usually, we estimate when you enter Catastrophic Coverage based on your total out-of-pocket spending (TrOOP
), but in this FAQ, we are estimating your retail drug purchases necessary to meet your TrOOP. In other words, after you spend over $6,550 out-of-pocket in 2021
$7,050 out-of-pocket in 2022
, you will meet your Medicare Part D prescription drug plan's out-of-pocket spending limit (TrOOP), exit the Coverage Gap or Donut Hole phase
of your Medicare drug plan, and enter the Catastrophic Coverage phase - and based on annual Part D plan parameters
and past purchases of generic and brand drugs, we can estimate the retail drug costs necessary to meet your annual TrOOP.