The Stages of Your Prescription Drug Plan

Medicare Part D covers your prescription drugs. There are four distinct stages of your prescription coverage. Each stage has specific guidelines to meet before moving on to the next stage.

Stage One

You have a deductible of $400. Basically, you pay 100% of your plan’s cost for your medications until you’ve paid $400. Once you’ve met your deductible, your plan starts to pay according to your plan’s Explanation of Benefits.

Stage Two

Your initial coverage limit is $3,700. This limit amount is like your “spending amount.” Once it’s gone you’ll move on to stage 3. This amount isn’t reduced by how much you pay. It’s reduced by the plan’s contracted cost of the medication. Basically, if you pay $10 and the plan pays $100, you’ll subtract $110 from the coverage limit of $3,700.

Stage Three

This stage is called the Doughnut Hole with the coverage limit of $4,950. In this stage you pay 40% of your plan’s contracted cost for each brand medication and 51% for generics. Your true out-of-pocket cost much reach $4,950 before moving on to Stage 4.

Stage Four

In stage four you move on to catastrophic coverage. Once you’ve spent the $4,950 in Stage 3, your costs drop to 5% of the plan’s contracted cost or $3.30 (or $8.25 for brand), whichever is greater.

The following are a few tips to help keep your prescription drug costs low and keep more money in your pocket.

• Make a list of all your medications
• Include the exact name, dosage, how often you refill and refill amount
• Go to the Medicare prescription drug plan finder
• Enter your zip code, then select the choices that apply to you (Step 1 of 4)
• Enter your first drug
• Write down your Drug List ID and Password Date
• When your list is complete select your pharmacy
• Sort results by . . .
• Most will sort by lowest annual retail cost
• Compare your cost at retail vs. mail order
• Avoid any prescription drug plans with less than 3 stars
• Make sure all your drugs are included in the plan formulary
• Take advantage of the MTM (Medication Therapy Management) program
• Compare formulary drug costs with pricing through retail savings offers and Canadian pharmacy’s