Part D: Four Stages of Drug Coverage
Stage 1: Rx Deductible:
The amount you must pay for health care or prescriptions, before Original Medicare, your Medicare drug plan, your Medicare Health Plan, or your other insurance begins to
pay. For example, in Original Medicare, you pay a new deductible for each benefit period for Part A, and each year for Part B. These amounts can change every year.
Stage 2: Initial Rx Coverage Level:
Once you have met your yearly deductible, and until you reach the plan's out-of-pocket maximum, you pay a copayment (a set amount you pay) or coinsurance (a percentage of the total cost) for each
covered drug.
Stage 3: Rx Coverage Gap:
Starting January 1, 2011, if you reach the coverage gap (also called the "donut hole") in your Medicare prescription drug coverage, you will get approximately a 50% discount on covered brand drugs.
Medicare has also increased its coverage of generic drugs for beneficiaries in the coverage gap so that beginning in 2011 you will pay less for generic drugs as well. The drugs eligible for the brand
discount or the additional generic savings may change based on the information we have available.
Stage 4: Catastrophic Rx Coverage:
Once you reach your plan's out-of-pocket limit during the coverage gap, you automatically get "catastrophic coverage." Catastrophic
coverage assures that once you have spent up to your plan's out-of-pocket limit for covered drugs, you only pay a small coinsurance amount or a copayment for the rest of the year.
Visit Medicare.gov for more information.
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