No. In this situation, you will pay your initial copayment (or cost sharing) for the $1,894 drug
plus the difference of the retail amount that takes you into your plan's Donut Hole or Coverage Gap -
less any applicable Donut Hole Discount applied to the balance of the purchase that falls into the Donut Hole.
As background, a prescription drug purchase that exceeds your Medicare prescription drug plan's
Initial Coverage Limit and then crosses into the Coverage Gap or Donut Hole portion of your Medicare Part D plan is known as a "
straddle claim" because it will cross to different phases of your Medicare Part D coverage.
Here is how we can estimate your straddle claim cost at the pharmacy:
- Your plan's Initial Coverage Limit: $2,600
- Your current balance in the Initial Coverage Phase: $930
- What you have remaining before reaching the Donut Hole or Coverage Gap Phase: $1,670 ($2,600 - $930)
- You purchase a brand-name drug with a retail cost of: $1,894
- Your cost-sharing is 30% coinsurance for this drug during your Initial Coverage Phase
- Your cost or Medicare Part D plan's cost-sharing amount for this portion of the purchase that occurs in the Initial Coverage phase (30% of the $1,670): $501
- Your additional cost for the balance of the retail price that "straddles" or carries over into the Donut Hole or Coverage Gap is ($1,894 - $1,670): $224
- You receive a 75% discount on all formulary drugs in the Donut Hole (so you pay 25% of the retail balance).
- Your additional cost in the Donut Hole is 25% * $224: $56
- Your total cost for this "straddle claim" purchase would be $501 + $56 = $557
And now for a little more detail . . .
Step #1 - Cost in the Initial Coverage Limit
In this example, the first $1,670 of your $1,894.70 drug purchase will
still be in your Initial Coverage Phase and you will be charged only
your normal Medicare Part D plan 30% coinsurance for the first $1,670 -
or $501.
Step #2 - Cost in the Coverage Gap or Donut Hole
The second portion of your purchase, $224, falls into the Coverage Gap or Donut Hole and you will receive a
75% discount on this part of the purchase (or pay 25% of $224 = $56).
So - your entire purchase would then be calculated to what you paid in the Initial Coverage Phase
plus what you pay in the Donut Hole or Coverage Gap: $501 + $56 = $557.
Please note that since this purchase was for a brand-name medication,
you would get 95% credit of the $224 portion of the purchase toward
exiting the Donut Hole (or your
TrOOP limit
$7,400 in 2023 and increasing to
$8,000 in 2024).
Click here if you wish to see the other Medicare Part D plan standard plan parameters since 2006:
q1medicare.com/PartD-The-MedicarePartDOutlookAllYears.php
Click here if you wish to see how the Donut Hole Discount changes until 2020:
Q1FAQ.com/470