Dear Marci,

The cost of my medications at the pharmacy has suddenly changed even though I have the same drug plan. What could have caused this?

-Juan (Los Angeles, CA)

Dear Juan,  

Good question! Drug costs can change throughout the year depending on which phase of Part D drug coverage you’re in. 

You should know that there are four different phases of Part D coverage: 

Deductible Period 

  • You’re in this period until you meet your deductible for the year. Until then, your drugs will cost the full negotiated price. Keep in mind that deductible amounts will vary by plan.

Initial Coverage Period 

  • Once you meet your deductible, your plan will help pay for your drug costs. You’ll have a copayment and coinsurance determined by your specific plan. 

Coverage Gap (aka the Donut Hole) 

  • When you and your plan’s payments towards drug costs have reached a predetermined limit ($5,030 for 2024), you become responsible for paying 25% of the cost of your medications. 

Catastrophic Coverage 

  • You enter this period after you reach $8,000 in out-of-pocket costs for your covered drugs. Good news for 2024: in the catastrophic coverage phase, you’ll have no cost-sharing for the remainder of the year. 
  • Out of pocket costs that count towards this limit include your deductible; payments during the initial coverage period; almost the full cost of brand-name drugs during the coverage gap; payments made by others on your behalf (family, charities, etc.); and payments made by State Pharmaceutical Assistance Programs (SPAPs), AIDS Drug Assistance Programs, and the Indian Health Service. 
  • Costs that don’t help you reach catastrophic coverage include your premiums, plan contributions towards drug cots, the cost of non-covered drugs, the cost of covered drugs from out-of-network pharmacies, and the 75% generic discount. 


A few things to keep in mind 

  • Your plan should track your out-of-pocket spending and include this amount in your monthly statements. 
  • As of 2025, the out-of-pocket maximum for covered drugs will be $2,000 and there will be no coverage gap. 
  • Your local State Health Insurance Assistance Program can help you determine if you’re eligible for programs to help lower your drug costs.  

I hope that clarifies things! 


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