Does the discounted price or the full drug price count toward the amount I need to reach catastrophic coverage?

You pay 50 percent of the price for brand-name drugs, but the full price will count toward the amount you need to qualify for catastrophic coverage. (This includes any costs you pay in dispensing fees to fill any prescription.) So in the example above, even though Mrs. Smith paid $52 for her prescription, the entire $102 counts toward the amount she needs to make her eligible for catastrophic coverage.

What happens if I fill a prescription and only part of the amount is in the coverage gap?

The 50 percent discount will only apply to the portion of your claim that’s in the coverage gap. For example, if you fill a prescription that costs $100 and only $50 of that cost is in the coverage gap, the discount will only apply to that $50. In this case, you would pay your normal copayment on the $50 portion of the prescription that’s not in the coverage gap, plus $25 (50 percent of the $50 portion that’s in the coverage gap). Your normal copayment plus the $50 portion that’s in the coverage gap will count as out-of-pocket spending and help you get out of the coverage gap.

Will I receive a 50 percent discount on all Medicare-covered brand-name prescription drugs?

If a drug company has signed an agreement to participate in the Medicare Part D discount program, all of the Medicare-covered Part D brand-name drugs they make are covered during the coverage gap for that calendar year. This includes prescription drugs on the plan’s list of covered drugs and those covered through an appeal.

How is coverage for generic drugs changing in the coverage gap?

In 2012, Medicare will give you a 14 percent discount on the price of your generic drugs while you are in the coverage gap. You will pay the remaining 86 percent of that price. The coverage for generic drugs works differently than the 50 percent discount for brand-name drugs. For generic drugs, only the amount you actually pay will count toward getting you out of the coverage gap. Also, the dispensing fee is included as part of the cost of the drug. However, since several Part D plans do pay for generic coverage in the gap, you should check the details of your plan. 

Here’s an example: Mrs. Smith reaches the coverage gap. She goes to the pharmacy to fill a prescription for a Medicare Part D-covered generic drug. The price for the drug is $20 and the dispensing fee of $2 is then added to the cost. Once the 14 percent discount is applied to the $22, she will pay $18.92 for the covered generic drug. The $18.92 amount she pays will be counted as out-of-pocket spending toward the amount she needs to make her eligible for catastrophic coverage.

Will I get additional savings if I have a Medicare drug plan that already includes coverage in the gap?

Yes. You may get a discount after your plan’s coverage has been applied to the price of the drug. The 50 percent discount for brand-name drugs will apply to the remaining amount that you owe. For example, if you’re in a drug plan that offers a 60 percent discount on brand-name drugs while you're in the coverage gap and you fill a $100 brand-name prescription, the cost of your prescription after your plan’s savings is $40. The 50 percent discount is then applied to the $40 amount and you would pay $20 for the prescription. The $40 will count as out-of-pocket spending and help you get out of the coverage gap.

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