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Medicare Part D: Drug Coverage Stages

Medicare Part D: Drug Coverage Stages

Every Medicare Part D plan (whether it’s a stand-alone plan or a Medicare Advantage plan with drug coverage built-in) is structured with 3 stages of coverage:

  1. Initial Coverage Stage: in this stage you pay a flat fee (called a co-pay) for each prescription that you fill. The co-pays in this stage are based on the tier level of your drugs. You stay in this stage until your total drug costs reach a specified limit set each year.
  2.  Coverage Gap Stage (“Donut Hole”): after your total drug costs reach the Initial Coverage Stage limit, you enter the coverage gap stage, which is often times referred to as the “donut hole”. During this stage, you no longer pay the co-pay amount from Stage 1 but instead you pay a percentage of the cost of your drugs. You stay in this stage until your out-of-pocket costs reach the next limit set each year.
  3.  Catastrophic Coverage Stage: after your out-of-pocket costs reach the Coverage Gap Stage limit, you enter the catastrophic coverage stage – where you pay a small co-pay or co-insurance amount for each prescription. You stay in this stage for the remainder of the calendar year.

If you have questions about Medicare Part D, we’re here to help.  Contact us anytime at (941) 405 – 3900.

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