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Prescription Drugs

One of the most complex coverage plans

Four Phases of Part D Coverage

EACH WITH IT’S OWN INTRICACIES

Phase 1 : The Deductible Phase
The first phase of any Part D plan is the deductible phase. Deductible dollar amounts will vary based on the plan you choose – the maximum being $480 in 2022.

You are responsible for your full deductible amount before your Part D plan starts assisting with any prescription drug costs.

Phase 2 : Initial Coverage
Once you have met your deductible, you enter the initial coverage phase. While here, you will have copays that are specific to your plan coverage.

You remain in the Initial Coverage Phase until the total cost of your deductible, your copays, and the money your Part D plan has contributed add up to $4,430 (2022).

Phase 3 : Coverage Gap aka The Donut Hole
The coverage gap is the most notorious phase of Part D coverage because everything changes once you reach the donut hole.

While in this phase, you are responsible for 25% of the drug cost.

In Phase 2, your deductible, copays, and the amount the insurance paid all contributed to your $4,430 level to move out of that phase. To get out of the Coverage Gap, only your payments and a discount amount from drug manufacturers (usually 50% of the drug cost) count toward your totals.

Once the amount you’ve paid (deductible, copays, coinsurance) and the manufacturer discounts add up to $7,050 (2022), you can move into the last phase of drug coverage.

Phase 4 : Catastrophic Coverage
While in the Catastrophic Coverage phase, you pay the greater of:

  • 5% of the cost of the drug, or
  • $9.85 per prescription for brand drugs, or
  • $3.95 per prescription for generic drugs
    (2022 numbers)
 

There is no out-of-pocket maximum nor is there a way to get out of this phase until January 1st of the next year where everything resets and you go back to Phase 1 : The Deductible Phase.

Part D : Formularies & Tiers

HOW PRESCRIPTIONS ARE ORGANIZED

Part D : Deep Dive

DEEP DIVE INTO HOW PART D WORKS


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