Medicare Part D cost

How it works.

Every new enrollee, and at the begining of each year, Part D plans have a deductible phase. For 2023 the deductile is $505. Some of the higher cost plans do not charge the deductible, and some other plans choose not to charge the deductible for certain generic drugs.

Once the deductible is met you enter the “Initial Coverage Limit” level. While at this level you get your medications based on the cost of what teir level stated in that plans formulary. The retail value of each prescription is calculated and once you purchase $4,660 worth of additional meds you enter into the next level.

This level is called the “Coverage Gap” although it is commonly referred to as the “Donut Hole”. While in this level you are responsible for 25% of the cost of your medications. Once you reach the out-of-pocket drug cost (the total acost of your medications) of $7,400 you move onto the final stage.

The final stage is called “Catastrophic Coverage”. While in this stage Generic drugs cost $4.15 or 5% whichever is greater, and name brands cost $10.35 or 5%, whichever is greater. This stage last the remainder of the current year and the whole process starts over January 1st.

It’s important tp re-evaluate your plan each as formularies can change from year to year. Each year from October 15th to December 7th you have AEP (annual election period), this it the only time you will have to change your plan for the coming year barring a Special Enrollment period being triggered.