Prescription Drug Plans

Purchasing a Prescription Drug Plan

Prescription Drug Plans

Prescription drug coverage is available to everyone with Medicare and is only available through private insurance companies. You should join a Medicare drug plan even if you don't take many prescriptions now. If you don’t join a Medicare drug plan when you are first eligible, and you don't have other creditable prescription drug coverage, you'll likely pay a late enrollment penalty when you do sign up.

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  • How do I get Medicare Prescription Drug coverage?

    • Join a Drug Plan or Medicare Advantage Plan (MAPD) run by an insurance company or other company approved by Medicare.
    • You must live in the service area of the plan you want to join.
    • You are allowed Prescription Drug (Rx) coverage from only one source.
    • Once you join a plan, you are responsible for paying the premiums, copayments and/or coinsurance for your medication. All prescription drug plans follow the same rules but every plan has different costs, approved drug lists and pharmacy networks.

Four Phases of Prescription Drug Coverage

Deductible Phase

In this Phase, you pay the plans deductible ($545 is the benchmark or standard) if it has one. The deductible for some plans may be less depending on structure. The deductible for some plans only applies to select tier levels. If your plan has no deductible, your plan starts in the Initial Coverage phase.

Initial Coverage Phase

In this Phase, you pay for your medication as described by your plan.


  • Tier 1: Preferred Generic (lowest copay)
  • Tier 2: Generic (next lowest copay)
  • Tier 3: Preferred Brands (higher copay)
  • Tier 4: Non-Preferred Brands (next higher copay)
  • Tier 5: Specialty Drugs (Highest co-insurance)


Once you and the insurance company, together, spend $5,030, you enter the next phase – The Donut Hole or Coverage Gap.

Coverage Gap or "Donut Hole"

In the Coverage Gap or “Donut Hole,” you will pay 25% of the plans negotiated prices for generics and 25% for brand drugs. Once you have reached $8,000 in TrOOP Money, you enter the next phase – Catastrophic Coverage.


TrOOP Money = your True Out Of Pocket money spent in the Deductible and Initial Coverage phases and the 70% credit you received in the Donut Hole for the negotiated cost of the drugs. TrOOP costs do NOT include any money spent by the insurance company.

Catastrophic Coverage

New for 2024!


In the Catastrophic Phase, you will pay $0 for all of your covered medications. You will remain in this phase for the balance of the year. All coverage resets January 1 of each year, no matter when you joined your plan.

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