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 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 deductibleSee details in footnote1 plans such as the SilverScript Choice and PlusSee details in footnote2 plans start in the Initial Coverage stage. Some plans other than SilverScript charge as much as $405 for a deductible.

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 $3,750. You exit the Coverage Gap stage when your total out-of-pocket costs (except for premiums) have reached $5,000. Out-of-pocket costs include your annual deductible, as well as your copayments or coinsurance. The SilverScript Plus plan offers additional 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 $5,000. During this stage, you usually pay a low copayment or coinsurance for prescription drugs.

1Alaska Choice Plan has a $405 deductible. Arizona and Hawaii Choice Plans have a $100 deductible on drug tiers 3-5.

2SilverScript Plus (PDP) is not available in Alaska.