How Do Prescription Drug Plans Work?

Here is important information you need to know about owning a prescription drug plan:

  • Annual Deductible — There is a deductible you must pay for a Part D plan. Your deductible may be different, or waived entirely, but the max amount you can be charged is $545 in 2024. You will pay a discounted price for your medications until you have satisfied the deductible. After that, you begin initial coverage.

  • Initial Coverage — During initial coverage, you pay a copay for your medications based on your plan’s formulary. Each prescription drug plan separates its medications into tiers. Each tier has a copay amount for which you are responsible. It is typically separated by generic drugs, preferred name brands, even more specialized medications. In 2024, the initial coverage cap is $5,030. After you and the insurance company together have paid this amount, then you enter the coverage gap.

  • The Coverage Gap (Donut Hole) – During the coverage gap, you will still have significant discounts for generic medications. Most generic and brand-name drugs receive a 75% discount from the drug manufacturer and the government. So you will typically cover 25% of the cost until reach the Part D True Out-of-Pocket limit of $8000 in 2024.

  • Catastrophic Coverage – If you exceed the coverage gap, your plan will begin to pay 100% of the costs of your formulary medications for the rest of the year.

How would I enroll?

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*We do not offer every plan available in your area. Currently we represent over 20 organizations, which vary the number of products we offer in your area. Please contact, 1800Medicare, or your local State Health Insurance Program (SHIP) to get information on all your options.

*While the Center for Medicare and Medicaid Services (CMS) is requiring us to add this disclaimer, please note that we will discuss all plans available in your area, helping you choose the best plan to fit your needs.