When this occurs and your prescription purchase moves you between Medicare plan coverage phases, you will have a “straddle claim
” and you will notice a difference in your drug cost as a portion of coverage will fall into two or more parts of your drug plan. In this example, the cost of your prescription medication purchase is split between your Initial Coverage Phase and your Donut Hole phase.
Once you exceed your Initial Coverage Limit, you will enter the Donut Hole portion of your Medicare Part D plan coverage and the remainder of your prescription purchase will be reduced by the Donut Hole discount.
How does this work? Example of a 2020 Straddle Claim:
The retail price of your drug: $1,000
Your total accumulated retail drug costs before the $1,000 drug purchase: $3,900
Your Medicare Part D plan has a standard $4,020 Initial Coverage Limit
Your plan's coverage cost or co-pay for the $1,000 formulary drug: $1001. Your cost to exit the Initial Coverage Phase
will need to spend $120 to meet the $4,020 Initial Coverage Limit
($4,020 - $3,900) - and you will pay $100 as a co-pay for your
medication during this phase.2. The cost in the Donut Hole
balance of the retail cost or $880 ($1,000 - $120) will carry over to
the next phase of your drug coverage or the Donut Hole where you will
receive the 75% Donut Hole discount
costing you $220 in the second portion of this straddle claim.3. Your total cost for the $1,000 drug
So together in 2020, you would pay $100 + $220 for a total cost of $320 for this drug.Question: Can the coverage cost exceed the retail drug cost?No.
The total of your plan's cost-sharing plus the Donut Hole cost (not including the Donut Hole discount) cannot exceed the normal negotiated retail price of your medication -- as you never pay more than the negotiated retail price.