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Annual Deductible
If your Part D insurance plan has an Annual Deductible, you have to meet your annual deductible for the year, first. Until this is met your drugs will cost the full negotiated price. The deductible amounts will vary by plan. After you meet your Annual Deductible then you pay the plan copays: Tiers 1 through 5 depending on what Tier your medication falls on.
Initial Coverage Period
Once you meet your deductible, your plan will help pay for your drug costs. You’ll have a co-payment and/or co-insurance to pay determined by your specific plan depending on what Tier your medication falls on. The plan will pay the difference from your copay you pay.
Coverage Gap (aka the Donut Hole)
When both you and your plan’s payments towards drug costs have reached a predetermined limit ($5,030 for 2024), you become responsible for paying 25% of the cost of your medications.
Catastrophic Coverage
You will then you enter the Catastrophic Coverage stage (at $8,000 in 2024) (after paying 25% of the total cost of your medications in the Donut Hole) in total out-of-pocket costs for your covered drugs.
The good news for 2024: in the catastrophic coverage phase you’ll have no cost-sharing for the remainder of the year after paying the $8,000 in TOTAL drug cost; another words, you will have paid the maximum out of pocket for your medications for the year..
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Out of pocket costs that count towards this limit include your deductible; copay and/or co-insurance payments during the initial coverage period; almost the full cost of brand-name drugs during the coverage gap; payments made by others on your behalf (family, charities, etc.); and payments made by State Pharmaceutical Assistance Programs (SPAPs), AIDS Drug Assistance Programs, and the Indian Health Service.
- Costs that don’t help you reach catastrophic coverage include your premiums, plan contributions towards drug costs, the cost of non-covered drugs, the cost of covered drugs from out-of-network pharmacies, and the 75% generic discount.
A few things to keep in mind:
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Your Part D insurance plan and the pharmacy would be tracking your prescription costs including the total cost of your medication, your out-of-pocket drug spending, how close you are getting to the donut hole from month to month, and mail you a monthly summary statement called the Explanation of Benefits.
- In 2025, the projected out-of-pocket maximum for covered drugs will be $2,000 and there will be no coverage gap.
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Your local State Health Insurance Assistance Program can help you determine if you’re eligible for programs to help lower your drug costs. These programs are called the Extra Help program (AKA: Low Income Subsidy program (LIS) ). You can also call your local county Department of Social Services for more information and to see if you qualify for benefits.
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Another NY state prescription drug discount program is called EPIC or Elderly Pharmaceutical Insurance Program: EPIC Helpline at 1-800-332-3742
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You can also access www.GoodRx.com website to find drugs you are currently taking for a lower cost. You would pay CASH for the medications using GoodRx instead of applying the cost of the drug to your insurance plan. Discuss with your Pharmacy and ASK for the GoodRx discount.
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