Stages of Part D Prescription Drug Coverage

1. Deductible Stage

The amount you pay for medication costs BEFORE your plan begins to pay its share of your medication costs. The amount of the Part D deductible varies by plan, but Medicare sets a cap on deductibles every plan year. In 2025, the maximum annual drug deductible is set at $590. Some Part D plans have $0 deductibles, others go as high as $590 in 2025. If you are lucky to be on a plan with a $0 deductible, you skip this stage entirely.

2. Initial Coverage Stage

During this stage, you share Part D drug costs with your drug plan until you reach a certain threshold amount. Just like the deductible, this amount changes annually and is set by Medicare. During this period, you are responsible for copays, and/or co-insurance amounts. In 2025, the shared total is $2,000. Once you and your plan spend $2,000 on covered medications, you move into stage 3 of prescription Drug Coverage, AKA the Catastrophic Coverage Stage.

3. Catastrophic Coverage Stage

In 2025, after you have met $2,000 in out-of-pocket costs for covered drugs, you leave the initial coverage stage and move into catastrophic coverage. In this stage, your costs end for the remainder of the year for all formulary covered medications.

What Counts towards your Out of Pocket costs?

• Deductibles you paid, if any.
• Copays and or coinsurance aounts you paid during the initial coverage stage.
• Manufacturer discounts on covered brand name medications.
• Amounts paid by others for your medication costs, including charities and other family members
• Amount paid by State Pharmaceutical Assitance Programs, AIDS Drug Assistancee Programs & the Indian Health Service.

What Doesnt Count Towards your Total Out of Pocket Costs?

• Monthly plan premiums.
• Costs for non-formulary medications, unless your plan approves a formulary exception.
• Costs for covered medications received at an out-of-network pharmacy.
• Manufacturer discounts received on generic medications.
• Pharmacy dispensing fees.

Need Help Deciding on the Right Prescription Drug Plan?

Call 813-280-9560 today. There is zero cost to you for our services & we can also price out Medicare Supplement policies as well.