Part D drug plans are how Medicare recipients receive their prescription drug coverage. Whether you have a Medicare Advantage plan or a Supplemental plan, your Part D works the same way with 4 levels of coverage. The 4 levels of coverage are:
Deductible Phase – If your plan has a deductible, you must pay the full amount of your medications until the deductible is met. Some plans exclude Tier 1 and Tier 2 drugs from the deductible.
Initial Coverage Phase – You pay a portion of your drug cost via a copayment or coinsurance until your total costs reach $4,130.00 (Initial Coverage Limit for 2021 plans). Once this is met, you move into the Coverage Gap.
Coverage Gap or Donut Hole – You pay 25% of drug costs for brand and generic drugs until total out-of-pocket (TROOP) costs reach $6,550.00 (TROOP for 2021 plans) at which time you move into Catastrophic Coverage.
Catastrophic Coverage Phase – You pay the greater amount of 5% of the drug costs on any tier or $3.60 copay for Tier 1 & 2 drugs and $8.95 copay for all other tiers.
Part D drug plans may have changes every year which might include, premium and deductible increases (or decreases), formulary changes (the drugs covered under the plan), tier changes (changes to tiers of covered medications) and changes in preferred pharmacies. You will receive an Annual Notice of Change every year from your drug plan. You should check to make sure your medications are still covered under the plan, the tiers haven’t changed and whether a deductible has increased or been added.
The Annual Enrollment Period starting on October 15 and lasting to December 7 is the time to switch coverage, with your new plan going into effect on January 2021.