How many payment phases are associated with Medicare Part D plans?

There are four different phases—or periods—of Part D coverage: Deductible period: Until you meet your Part D deductible, you will pay the full negotiated price for your covered prescription drugs.

What are the 4 phases of Medicare Part D coverage?

Throughout the year, your prescription drug plan costs may change depending on the coverage stage you are in. If you have a Part D plan, you move through the CMS coverage stages in this order: deductible (if applicable), initial coverage, coverage gap, and catastrophic coverage.

How many phases does a Part D prescription drug plan have?

Your Medicare Part D costs for prescription drugs may change during the year. This is because Part D coverage has four different phases. Every Medicare Part D plan follows the same coverage phases, meaning each beneficiary should be aware of how they work, particularly if you require high-cost drugs.

What is Stage 3 of Medicare Part D?

Stage 3—Coverage Gap

Most Medicare drug plans have a Coverage Gap (also called the “donut hole”). This means there's a temporary limit on what the drug plan will cover for drugs. Not everyone will enter the Coverage Gap, and it doesn't apply to members who get Extra Help to pay for their Part D costs.

How many Medicare Part D stages are there for blue MedicareRx?

Medicare Part D coverage includes four stages: Deductible, Initial Coverage Stage, Coverage Gap (or Donut Hole) and Catastrophic Coverage.

2022 Medicare Part D Drug Coverage Phases

What is the catastrophic phase of Medicare Part D?

The catastrophic phase is the last phase of Medicare Part D drug coverage. You reach it when you've spent your way through the donut hole phase. When you get to the catastrophic phase, Medicare is supposed to pay the bulk of your drug costs. By then, your healthcare expenses have reached more than $6,550 in 2021.

How do Part D plans work?

You pay a monthly premium to an insurance carrier for your Part D plan. In return, you use the insurance carrier's network of pharmacies to purchase your prescription medications. Instead of paying full price, you will pay a copay or percentage of the drug's cost. The insurance company will pay the rest.

What is the 3rd stage of Medicare Part D where you pay more for your medicines?

Stage 3 – Coverage Gap

In Stage 3, you generally pay no more than 25% of the cost of generic and brand name drugs. You stay in Stage 3 until the amount of your year-to-date “out-of-pocket drug costs” (costs paid by you or a subsidy program) reaches $7,050.

What are Tier 4 and 5 drugs?

Level or Tier 4: Nonpreferred brand-name drugs and some nonpreferred, highest-cost generic drugs. Level or Tier 5: Highest-cost drugs including most specialty medications.

What are the prescription drug tiers?

There are typically three or four tiers:
  • Tier 1: Least expensive drug options, often generic drugs.
  • Tier 2: Higher price generic and lower-price brand-name drugs.
  • Tier 3: Mainly higher price brand-name drugs.
  • Tier 4: Highest cost prescription drugs.

What is a donut hole in Medicare prescription drug?

Most Medicare drug plans have a coverage gap (also called the "donut hole"). This means there's a temporary limit on what the drug plan will cover for drugs. Not everyone will enter the coverage gap. The coverage gap begins after you and your drug plan have spent a certain amount for covered drugs.

Is Medicare Part D Medicare supplement plan?

Medicare Plan D is a Medicare Supplement plan, also known as a Medigap plan. Plan D is one of the 10 standardized Medicare Supplement plans available in most states: A, B, C, D, F, G, K, L, M, and N. The names “Medicare Plan D”, “Medicare Supplement Plan D”, and “Medigap Plan D all mean the same thing.

What is the initial coverage limit Medicare Part D?

The Initial Coverage Limit (ICL) will go up from $4,130 in 2021 to $4,430 in 2022. This means you can purchase prescriptions worth up to $4,430 before entering what's known as the Medicare Part D Donut Hole, which has historically been a gap in coverage.

Does Medicare Part D have an out of pocket maximum?

Medicare Part D plans do not have an out-of-pocket maximum in the same way that Medicare Advantage plans do. However, Medicare Part D plans have what's called a “catastrophic coverage” phase, which works similar to an out-of-pocket maximum.

What does full LIS mean?

The Low-Income Subsidy (LIS) program helps pay for a portion of Part D prescription drug plan costs, including Part D premiums, deductibles and copayments. Depending on your income and assets, you may qualify for the full subsidy or a partial subsidy.

Is Lis the same as extra help?

There is no difference between the Medicare Part D Low Income Subsidy (LIS) and the Medicare Part D "Extra Help" Program. We simply have two name for the same program.

How do you qualify for SLMB?

In order to qualify for SLMB benefits you must meet the following income requirements, which can also be found on the Medicare Savings Programs page:
  1. Individual monthly income limit: $1,269.
  2. Married couple monthly income limit: $1,711.
  3. Individual resource limit: $7,730.
  4. Married couple resource limit: $11,600.

What does initial coverage stage mean?

Initial coverage period: After you meet your deductible, your plan will help pay for your covered prescription drugs. Your plan will pay some of the cost, and you will pay a copayment or coinsurance.

What is the Part D donut hole for 2021?

For 2021, the coverage gap begins when the total amount your plan has paid for your drugs reaches $4,130 (up from $4,020 in 2020). At that point, you're in the doughnut hole, where you'll now receive a 75% discount on both brand-name and generic drugs.

Do I have to pay for Medicare Part D?

You're required to pay the Part D IRMAA, even if your employer or a third party (like a teacher's union or a retirement system) pays for your Part D plan premiums. If you don't pay the Part D IRMAA and get disenrolled, you may also lose your retirement coverage and you may not be able to get it back.

Why is Medicare Part D so complicated?

Part D plans have a certain quirk, often called the donut hole or coverage gap, which is important to understand before you purchase one of these plans. In essence, this is a gap in coverage that begins after your plan has spent a certain amount that year, but before you've reached your annual out-of-pocket limit.

How do Medicare Part D plan Compare?

Visit to find and compare plans. If you: Take specific drugs, look at drug plans that include your drugs on their formulary (a list of prescription drugs covered by a drug plan). Then, compare costs.