How Medicare Part D Works*
How Medicare Part D Works*
Stage | Amount Insured Member Pays During Stage | Trigger to Move to Next Stage |
|---|---|---|
1. Deductible | All drug costs | Meet plan's deductible ($0-$445) |
2. Initial Coverage | Fixed co-payments or co-insurance | Reach $4,130 in covered drug costs (considered as the out of pocket payments plus amounts paid by insurance) |
3. Coverage Gap (Donut Hole) | Generic drugs: 25% Brand-name drugs: no more than 25% | Reach $6,550 in out-of-pocket costs (includes costs for covered drugs paid since the beginning of the year plus the value of discounts† received on brand-name drugs while in this stage) |
4. Catastrophic Coverage | Generic drugs: the greater of $3.70 or 5% Brand-name drugs: the greater of $9.20 or 5% | |
* Data shown are for 2021 and may be different after that year. | ||
† For brand-name drugs, there is typically a manufacturer discount of about 50% of the price. This amount is counted as part of the out-of-pocket cost, which will help people get out of the coverage gap sooner. | ||