The Four Coverage Stages of Medicare's Part D Program | Blue MedicareRx Prescription Drug 2024 Plans (2024)

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The Four Coverage Stages of Medicare's Part D Program | Blue MedicareRx Prescription Drug 2024 Plans? ›

(Information provided below is specific to 2024)

If you have a Part D plan, you move through the CMS coverage stages in this order: deductible (if applicable), initial coverage, coverage gap, and catastrophic coverage. Select a stage to learn more about the differences between them.

Medicare Part D coverage includes four stages: Deductible, Initial Coverage Stage, Coverage Gap (or Donut Hole) and Catastrophic Coverage. It's important to understand each stage and how they may affect what you pay for your prescription drugs.

In 2024, after paying the initial deductible, a person on Medicare will pay 25 percent of drug costs. They will have a cap of about $3,300 and will no longer pay five percent of drug costs in the catastrophic phase.

Part A provides inpatient/hospital coverage. Part B provides outpatient/medical coverage. Part C offers an alternate way to receive your Medicare benefits (see below for more information). Part D provides prescription drug coverage.

This means there's a temporary limit on what the drug plan will cover for drugs. Not everyone will enter the coverage gap. The coverage gap begins after you and your drug plan have spent a certain amount for covered drugs. Once you and your plan have spent $5,030 on covered drugs in 2024, you're in the coverage gap.

Medicare Part A covers inpatient hospitals, skilled nursing facilities, hospice, inpatient rehabilitation, and some home health care services.

In 2024, once your out-of-pocket spending reaches $8,000 (including certain payments made on your behalf, like through the Extra Help program), you'll automatically get “catastrophic coverage.” This means you'll pay nothing for your covered Part D drugs for the rest of the calendar year.

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Explore your Part D coverage options with MedicareBlue Rx

MedicareBlue Rx provides prescription drug coverage for the drugs you take today and can protect you from unexpected costs for drugs you may need to take in the future.

2024 deductibles

SilverScript SmartSaver: $0 deductible for tier 1 drugs and a $280 deductible for tiers 2 through 5. SilverScript Choice: $545 deductible for all tiers.

Out-of-pocket costs

will be capped at $2,000, starting in 2025. You'll also have the option to pay out-of-pocket costs in monthly amounts over the plan year, instead of when they happen.

Beginning January 1, 2024, CMS is finalizing implementation of a separate add-on payment for healthcare common procedure coding system (HCPCS) code G2211. This add-on code will better recognize the resource costs associated with evaluation and management visits for primary care and longitudinal care.

The Centers for Medicare & Medicaid Services (CMS) has announced that the standard monthly Part B premium will be $174.70 in 2024, an increase of $9.80 from $164.90 in 2023. The annual deductible for all Medicare Part B enrollees in 2024 will be $240, an increase of $14 from the 2023 deductible of $226.

Thanks to the Inflation Reduction Act, President Biden's lower-cost prescription drug law, annual out-of-pocket costs will be capped at $2,000 for people with Medicare Part D in 2025, leading to even more savings for people with Medicare Part D in CY 2025.

You enter the donut hole when you and your plan spend a total of $5,030 in 2024. In the donut hole, you pay up to 25% out of pocket for all covered medications. You leave the donut hole once you've spent $8,000 out of pocket for covered drugs in 2024. 2024 is the last year for the donut hole.