Medicare Part D prescription drug plans
(PDPs and MAPDs
are required to keep track of each person’s prescription drug spending or TrOOP costs -
so your out-of-pocket spending and your total retail cost of formulary drug purchases
(gross covered drug purchases*
) transfer with you when you switch Medicare Part D plans
during the year.
In other words, your total out-of pocket drug spending (TrOOP) moves with you when
you move to another Medicare Part D plan.
If you move to another Part D plan with a different Medicare Part D plan design -
for example, assume your old Part D plan had an
and your new Part D plan does not have an initial deductible - your previous drug spending
will determine where you are within the phases of your new Medicare Part D plan.
If you had retail drug costs that exceeded your Initial Coverage Limit (for example, $4,130)
and were in your previous Medicare Part D plan's Coverage Gap or Donut Hole -
you will probably be in the Donut Hole
or Coverage Gap of your new Part D plan - assuming that the new plan has a similar
Initial Coverage Limit (for example, $4,130).
: Medicare notes that "[t]rue out-of-pocket (TrOOP)
costs are the expenses that count toward a person’s Medicare drug plan out-of-pocket
threshold of $6,550 [(for 2021
TrOOP costs determine when a person’s catastrophic coverage will begin."
More from the Centers for Medicare and Medicaid Services (CMS) . . .
"Part D rules [42 CFR §423.104(d)] require sponsors to track the
beneficiary’s TrOOP and correctly apply these costs to the TrOOP limit
in order to provide enrollees the catastrophic level of coverage at the
appropriate time. The TrOOP threshold is calculated on an annual basis
and must be transferred between Part D sponsors if a beneficiary
disenrolls and re-enrolls at any time before the end of a coverage year
or whenever a Part D plan other than the plan of record has paid.
Sponsor collection, and transfer if appropriate, of the TrOOP and gross
covered drug spending balances are essential for sponsors to correctly
manage the Part D benefit.". (page 36) [emphasis added]
Medicare Prescription Drug Benefit Manual, Chapter 14 - Coordination of
Benefits, (Rev. 18, 09-17-18),
Section 50.8 – Transferring TrOOP Balance When a Beneficiary Changes
Part D Sponsors (Rev. 17, Issued: 08-23-13, Effective Date: 06-07-10,
Implementation Date: 01-01-11), (https://www.cms.gov/ Medicare/ Prescription-Drug-Coverage/ PrescriptionDrugCovContra/ PartDManuals.html)
Gross covered drug costs (GCDC) amount to the retail value of the
formulary medications you purchase or "the total cost of drugs
(including dispensing fee and sales tax) regardless of payer" and
include "certain dispensing fees, but not including administrative
costs." The beneficiary’s accumulated gross covered drug costs
determine" whether the "beneficiary is in the Deductible or the Initial
Coverage Phase or has entered the Coverage Gap".
If I change my Medicare prescription drug plan during the year, will my drug deductible transfer to the new Part D plan?
If I am in the Donut Hole and switch Medicare Part D plans during the year, will I still be in the Donut Hole?
Manual p. 9-18, https://oig.hhs.gov/oei/ reports/oei-05-07-00610.pdf, and
42 CFR 423.308)
Medicare Prescription Drug Benefit
Manual, Chapter 14 - Coordination of Benefits, (Rev. 18, 09-17-18)
(https://www.cms.gov/ Medicare/ Prescription-Drug-Coverage/ PrescriptionDrugCovContra/ PartDManuals.html)