2016 Part D Standard Plan Cost-Sharing*


September 11, 2015

Part D Benefit Cost Periods Cost and Who Pays Beneficiary Pays (TrOOP) Plan Pays Total Amount Spent on Plan-Covered Drugs
Initial Deductible Beneficiary pays 100% Up to $360 $0 $360 (Amount spent on deductible, before ICP begins)
Initial Coverage Period (ICP) Costs of covered drugs are shared: 25% by beneficiary, 75% by plan Up to $737.50 $2,212.50 $2,950 (Amount spent during ICP, before Coverage Gap begins)
Coverage Gap
(“Donut Hole”)
Discounts in 2016:

Costs of plan-covered drugs are shared:

  • Beneficiary pays 58% for generic drugs, 45% for brand-name drugs, plus 45% of the pharmacy dispensing fee (approx. $1-3)
  • Plan pays 42% for generic drugs and 5% on brand-name drugs
  • Drug manufacturer provides 50% discount on brand-name drugs

Note about True Out-of-Pocket (TrOOP) costs:
The total amount spent in the Coverage Gap (up to $3,752.50) includes:

  • The drug costs paid by the beneficiary, and
  • The 50% discount on brand-name drugs provided by the drug manufacturer

Payments made by the plan during the Coverage Gap (42% on generics, 5% on brand-name drugs) do not count toward TrOOP

Coverage Gap begins once beneficiary reaches the Initial Coverage Limit

$3,310 – Initial Coverage Limit (Total amount spent on any initial deductibe and during ICP)

Up to $3,752.50 (Total amount spent during Coverage Gap)

$7,062.50 (Total amount spent during ICP and Coverage Gap, before Catastrophic Benefit Period begins)

Catastrophic Benefit Period Costs of covered drugs are shared:

Beneficiary pays reduced copay/coinsurance; plan pays the difference

Greater of:

5% coinsurance OR $2.95 copay for generic, $7.40 copay for brand or non-preferred

Any remaining portion of the negotiated drug price Beneficiary will remain in the Catastrophic Benefit Period through December 31, 2016

Part D benefit will reset on January 1, 2017, starting again with a deductible

*Most Part D plans are not standard plans. This means calculating TrOOP costs during the initial deductible and ICP varies by plan.

Source 2016 Call Letter (pg. 37) at: https://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Downloads/Advance2016.pdf

Center for Benefits Access – National Council on Aging – Updated August 2015

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