Here is important information you need to know about owning a prescription drug plan:

• Annual Deductible — There is a deductible you must pay for a Part D plan. Your deductible may be different, or waived entirely, but the max amount you can be charged is $545 in 2024. You could pay up to full retail price for your medications until you have satisfied the deductible. After that, you begin initial coverage. However, many insurance companies often have prescriptions that are discounted that are not subject to the annual deductible.

• Initial Coverage — During initial coverage, you pay a copay for your medications based on your plan’s formulary. Each prescription drug plan separates its medications into tiers. Each tier has a copy amount for which you are responsible. It ranges from generic drugs to even more specialized medications. In 2024, the initial coverage cap begins $5,030. After you and the insurance company together have paid this amount, then you enter the coverage gap.

• The Coverage Gap – During the coverage gap, you will still generally have significant discounts for generic medications. Typically, you will pay 25% for name brand medications and 37% for generics. Your gap spending will continue until you and the insurance company have paid $8,000 in 2024.

• Catastrophic Coverage – If you should spend past the coverage gap, your plan will begin to pay 100% of the costs of your formulary medications for the rest of the year.