Benefit Stages of Medicare Prescription Drug Plans

Information Provided by a Prescription Drug Policy Representative

All three stages below (Initial Coverage Period, Donut Hole or Coverage Gap, and Catastrophic Coverage) “kick in” after your deductible is met. The annual deductible for a Medicare prescription drug plan is $310, though there are three options to consider regarding how to meet this deductible.

Full Deductible

You can pay the full annual deductible out of pocket before the plan starts to cover your prescription drug costs. A plan requiring you to pay the full deductible has the lowest monthly premiums.

Partial Deductible

Plans that pay part of the deductible generally fall between the other two options as far as cost is concerned. These plans start picking up the cost of your drugs sooner than plans requiring you to pay the full deductible.

Zero Deductible

Zero deductible plans come with higher monthly premiums than the other two options. These plans, however, start covering the cost of Medicare-approved prescriptions immediately.

Initial Coverage Period

Your initial coverage period begins after your deductible is met. During this initial coverage phase, you pay a co-payment or coinsurance, and your prescription drug plan pays its share for each covered drug until the combined amount (including the deductible) reaches $2,930.

Donut Hole or Coverage Gap

Once you and your Medicare prescription drug plan have reached the combined $2,930 threshold, you will be in the Donut Hole or Coverage Gap period. During this period, you normally have to pay prescription drug costs out-of-pocket, although the Affordable Care Act provides seniors a 50% discount on covered brand name Medicare-approved medications. The donut hole phase continues until your total out-of-pocket costs, including your yearly deductible, co-payment, and coinsurance amounts, reach $4,700.

Catastrophic Coverage

When your out-of-pocket costs reach $4,700, you automatically get catastrophic coverage. With catastrophic coverage, you pay only a small co-payment or coinsurance amount for the rest of the year.

Not everyone will reach the donut hole or coverage gap phase, but why gamble with your health? There is Medicare supplement insurance designed to help you rest easy, and MedicareMall is here to help you sort through the options and come up with the prescription drug plan that is best for you. Contact MedicareMall now and we will start filling the Medicare gaps and giving you the peace of mind you deserve.

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