The following information is in reference to the standard minimum benefit structure for 2019 Medicare Plans:
The deductible is the amount a patient must pay for health care or prescriptions, before Original Medicare, their Medicare drug plan, their Medicare Advantage plan, or any other insurance plan begins to pay. During the deductible, patients will pay 100% of their medication costs until they reach the set deductible amount. These amounts can change every year.
Once the yearly deductible has been met, patients pay a copayment (a set amount) or coinsurance (a percentage of the total cost) for each covered drug. During this phase, the patient and the insurance plan share the cost of medications until the shared total equals $3,820.
Coverage Gap (aka Donut Hole)
The donut hole begins once the shared cost equals $3,820. In the donut hole, patients pay 25% of the cost of brand name drugs and 37% of the cost of generics. This phase ends when the patient's out-of-pocket cost reaches $5,000. However, for brand name drugs, 95% of the full cost—what the patient pays plus the 70% manufacturer discount payment—will count as out-of-pocket costs.
Once a patient reaches the plan's out-of-pocket limit of $5,000 during the coverage gap, he or she automatically gets "catastrophic coverage." It assures that once a Medicare patient has spent up to a certain limit for covered drugs, they only pay a small coinsurance amount or a copayment for the rest of the year. The patient will pay the greater of $8.50 for brand name and $3.40 for generic medications or 5% of the medication's total cost.
In Amplicare, some months may be marked "Transition". This isn't a specific phase of coverage, it simply means the patient is transitioning from one phase of coverage to the next during that month!
Have drug costs changed for a patient even though they haven't transitioned into a different phase of coverage? This article will help answer your questions!