The different stages of Medicare Part D coverage and understanding the Coverage Gap:

Your Medicare Part D plan benefit costs change throughout the year, so it’s important to understand what happens if you enter the Coverage Gap, also known as the Donut Hole. Review the four stages below to learn how costs other than your monthly premium may change.

The Annual Deductible Stage

You begin in the Annual Deductible stage when you fill your first prescription of the calendar year. During this stage, you pay the full cost of your drugs until the amount of your deductible has been reached. Then you move to the Initial Coverage stage. $0 deductible plans such as the SilverScript Plus (PDP)1 plan start in the Initial Coverage stage. SilverScript Choice (PDP) has no deductible on Tiers 1 and 22, which include many generic drugs. This plan has a deductible on Tiers 3-5, which are typically brand name drugs. 

The Initial Coverage Stage

This stage begins after you reach your deductible. If your plan does not have a deductible, this is the first stage of your benefit. During this stage cost sharing begins, which means you pay a copayment or coinsurance for prescription drugs until you reach your plan's initial coverage limit.

The Medicare Coverage Gap Stage

When you enter the Medicare Part D Coverage Gap stage, you have reached the Coverage Gap. This stage begins after your total drug costs have reached $4,020 in 2020. You exit the Coverage Gap stage when your total out-of-pocket costs (except for premiums) have reached $6,350 in 2020. Out-of-pocket costs include your annual deductible, as well as your copayments or coinsurance. The SilverScript Plus plan offers more coverage for those who enter the Coverage Gap.

Some members, such as those who are part of the Extra Help program, do not enter the Coverage Gap.

The Catastrophic Coverage Stage

You enter this stage after your out-of-pocket costs have reached $6,350 in 2020. During this stage, you usually pay a low copayment or coinsurance for prescription drugs.

1Plus plan not offered in Alaska.

2Deductible amounts on Tiers 3-5 vary by CMS region.