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Texas Part D Basics - Understanding the Coverage Gap

Medicare Part D drug plans have several stages of coverage during each calendar year. During each stage, you are responsible for a portion of your drug costs, depending on which drug plan carrier you choose. The stages are as follows:

Annual Deductible: You pay the first $310 in drug costs (in 2010)

Initial Coverage Level:  You pay a copay or coinsurance amount for each drug, and the plan pays the rest of the cost up until the total costs of your prescriptions filled (including what you have paid AND what the insurance company has paid) has reached $2,830

Coverage Gap (Donut Hole): You pay 100% of the costs of your prescription drugs. You will get a discount on the drugs because you belong to a Medicare drug plan. While some plans do provide limited coverage in the gap for generic drugs only, you may unnecessarily pay a higher premium for your plan if it is likely you won't reach the gap. Important Note: Starting in 2010, you will only pay 50% of the cost of your brand name Part D medications in the coverage gap - this will be a vast improvement for Medicare beneficiaries!

Catastrophic Coverage: Once you have spent $4550 out of your own pocket for Part D prescription drugs within one calendar year, the coverage gap ends and you enter catastrophic coverage. You then only pay 5% or less for each prescription drug until the end of the year.

All insurance carriers offering Texas Part D drug plans must include the minimum coverage outlined above. However, many carriers offer richer plans, such as plans that waive the deductible, for an extra premium. Each carrier also sets it's own pricing, formulary and copays every year.

Medicare Part D drug spending is tracked by the carrier you are insured with. If you move to a new county and have to change plans mid-year, the amount you have spent transfers with you to the new carrier and they continue the tracking.

For help with shopping for your Texas Medicare Part D Prescription Drug Plan options today, please call us or fill out our online Texas Medicare Part D quote form.