How Do Part D Stages Work?
Stage 1 – Deductible
If your plan has a deductible, this stage begins when you fill your first prescription of brand-name or speciality drugs. The deductible does not apply to generic drugs.
- This stage beings when you fill your first Tier 3, 4, or 5 (brand name and speciality drugs) prescription. The deductible does not apply to Tier 1 and 2 generic drugs.
- In Stage 1, you will pay the full cost of your brand name and specialty drugs up to the deductible amount.
Once you have reached your annual deductible, you will enter Stage 2.
Stage 2 – Initial Coverage
- In Stage 2, you pay your copay and we pay the rest.
- You stay in Stage 2 until the amount of your year-to-date total drug costs reaches $3,820 ($4,020 in 2020). Total drug costs include your copay and what we pay.
Once you and your plan’s costs reach $3,820 ($4,020 in 2020), you move to Stage 3—the Coverage Gap.
Stage 3 – Coverage Gap
Once Stage 2 is complete, all plans move to Stage 3.
- In Stage 3, you generally pay no more than 35% of the cost of brand name drugs, and only 44% of the cost of generic drugs (25% of the cost of brand name and generic drugs in 2020).
- You stay in Stage 3 until the amount of your year-to-date “out-of-pocket drug costs” (costs paid by you or a subsidy program) reaches $5,100 ($6,350 in 2020).
Once your out-of-pocket costs reach $5,100 ($6,350 in 2020), you move to Stage 4—Catastrophic Coverage.
Stage 4 – Catastrophic Coverage
Once Stage 3 is complete, all plans move to Stage 4.
- In Stage 4, your plan will pay most of the cost of your prescription drugs for the rest of the calendar year.
- For generic drugs, you only pay 5% of the cost or $3.40 (5% of the cost or $3.60 in 2020), whichever is greater.
- For brand-name drugs, you only pay 5% of the cost or $8.50 (5%of the cost or $8.95 in 2020), whichever is greater.
You remain in this stage for the rest of the plan year.