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Questions & Answers (FAQ)
The categories of Frequently Asked Questions (FAQs) can be found to the right. Simply click on one of the questions below or a category to the right.
| FAQ(s) found under Straddle Claims |
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| If the total cost of one drug purchase takes my annual cost over my Medicare plan's coverage limit and into the Donut Hole, will I pay the copay for my drug plus 50% of the cost that is over the coverage limit? |
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Yes, you are responsible for the co-payment of the purchase plus the amount of the purchase that exceeds your Medicare Part D plan's Initial Coverage Limit ($2,840 in 2011). However, in such a situation you will only pay up to the point where the total purchase price (including the 50% brand-name Donut Hole discount) is less than the retail cost of the medication.
As background, this question is an example of a "Straddle Claim" - where a single prescription purchase straddles two portions of your Medicare Part D prescription drug plan. In this situation, both the amount of your co-payment or cost-sharing for your medication purchase and how close you were to the Initial Coverage Limit will be important in the actual cost calculation.
For instance, let us say that you purchase a brand-name medication that has a retail price of $260 (total cost) and you usually pay a $60 co-payment for the medication.
If your total annual retail medication costs are already at $2,740, then you only need $100 more to reach the 2011 initial Coverage Limit of $2,840. (Click here to read more about the Initial Coverage Limits.) So $100 of the $260 retail cost falls into your plan's Initial Coverage Phase and the remaining $160 falls into your Coverage Gap or Donut Hole where you are 100% responsible for the prescription costs - and receive a 50% discount on brand-name drugs and a 7% discount on generic drugs.
Therefore, you will pay the $60 co-payment on the medication plus the $160 that falls into your Donut Hole for a total cost to you of $220 (Note that you actually pay $140 because of the $80 discount, in other words the 50% Donut Hole discount on the $160).
Again, notice that the 50% brand name Donut Hole discount of $80 is taken into consideration as to what you pay in the Donut Hole.
At this point, Medicare checks to make sure you will pay less for your medications than the negotiated retail drug price by using what they call the "lesser of" logic. Since, in this example, you would pay $220 ($60+$160) and that is less than the retail cost of $260, then no change in your payment is made. If the total cost (including the Donut Hole discount) exceeds the retail cost, you only will pay the retail cost.
For instance, if we were to change the example and say that you had a total annual retail cost of medications equal to $2,810 (that is, $30 away from the 2011 Donut Hole), you would still pay your same $60 co-pay for the medication and now have the remaining $230 that would go into the Donut Hole.
In this second example, your total cost would then be greater than the retail cost of $260 (the co-payment of $60 + the Donut Hole amount of $230 = $290). So, in this example, you would not be charged the $290 because of the "lesser of" rule and would instead have paid the maximum of the $260 retail price - plus you would receive the 50% Donut Hole discount on the amount of your purchase that falls into the Donut Hole.
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• I have a prescription with a retail cost of $1,894 and I have already purchased medications with a total retail cost of $930. If my Medicare Part D prescription drug plan has an Initial Coverage Limit of $2,600, will I pay the full price?
No. Your present drug purchase is calculated as a Straddle Claim. In your situation, you...
Last Update : 2012-03-25
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• If I have not yet met my initial deduction when I have fill a $1500 prescription, will any of the $1500 be applied to the my coverage [initial coverage phase], or will I have to pay the whole $1500 before my coverage goes in to effect?
Lets say that your plan has a $320 deductible and that your $1,500 medication has a 33% coinsurance ...
Date Added : 2011-12-03
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• Can you provide an example of the Medicare "Lesser Of" logic?
In the Medicare Part D program, the "lesser of" logic ensures that Medicare be...
Last Update : 2011-03-15
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• I have a Medicare Part D prescription drug plan with a $310 initial deductible. What do I pay when I refill my prescription and a single purchase moves me from my initial deductible into the part of my plan where I get paid coverage?
When the cost of your medication covers two parts of your Medicare Part D plan, you have a “st...
Date Added : 2011-03-15
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• Does the Donut Hole Discount apply to a retail drug purchase that straddles my Medicare Part D plan's Initial Coverage phase and the Coverage Gap or Donut Hole phase? In other words, does the Donut Hole discount apply to a Straddle Claim?
Yes. If the negotiated retail price of your medications moves you from the Initial Coverage ph...
Date Added : 2011-03-08
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