How Do Part D Plans Work?

All Part D plans are on a calendar year from January through December each year, regardless of when you start your plan.

For example: If you enroll in the Annual Enrollment Period (AEP) between October 15th and December 7th, it will become effective on 1/1/2016.

All Part D plans per Medicare have phases:

  • The Deductible Period – If you have a deductible, you pay the full amount for your medication until the deductible is met.
  • The Initial Coverage Period – You pay a co-pay or co-insurance until the full Cost of your medications reach $3,310. (Full Cost means the amount you and the plan pay)
  • The Coverage Gap Period also known as the Donut Hole. You will pay 45% of the full cost of your brand name medications, and 58% of the full cost of the generic medications. This period is when your full cost is between $3,310 and $4,850.
  • The Catastrophic Coverage Period – You pay whichever is greater of 5% of full cost or $6.60 for brand name medications and greater of 5% of full cost or $2.65 for generic medications.
  • This information is for 2016, however, these rates change annually.