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.