Question: I just picked up my medication and the cost was $0? Did they charge me the right price?

Answer: A little more than a year ago, I wrote an article talking about how Medicare Part D was going to change in 2024. I am beginning to talk with individuals who are benefiting from that change we talked about a year ago.

Medicare Part D has four phases of coverage: Deductible, Initial Coverage, Coverage Gap and Catastrophic Coverage. The retail cost of your medication moves you through those phases of coverage. The amount you pay is different in every phase.

The Inflation Reduction Act of 2022 includes several provisions that were to be phased in over time. I remember when I first heard about them, I felt like we couldn’t get there soon enough. Well, this 2024 change is one of those major changes to cost structures for individuals with Medicare Part D coverage. This change impacts those with very expensive medication the most.

Usually, I talk about pricing going way up during this time of year because individuals have hit the coverage gap where your cost goes to 25% of the retail cost. If your medication costs $100 retail, you would pay $25. If your medication costs $690 retail, you would pay $172.50.

Most individuals on Medicare do not reach the coverage gap, which is sometimes referred to as the “Donut Hole.” Your medications must total more than $420 per month retail to reach the coverage gap.

You may have been paying that 25% co-pays for the recent months and you now have hit the last phase of coverage called Catastrophic Coverage. There are even fewer people who reach the Catastrophic phase of coverage. During the catastrophic phase of coverage in 2024, you pay $0 for generics and for brand name medication for the rest of the year. To reach this phase of coverage in a calendar year, you must have retail medication costs of more than $8000. In 2024 most individuals spend about $3,300 at the pharmacy before they reach this $0 copay structure.

Sometimes we see individuals whose medications cost $28,000 per month, so they go into catastrophic coverage within the first month of the year. That would make ALL their medications cost $0 for the rest of the year. In past years we have worked with these individuals to find manufacturer assistance programs and grants to help meet these very high co-pays. In 2024 the costs can be expensive, but it is less than ever before.

In thinking about your question, you may have hit the catastrophic phase of coverage and moved from 25% to a $0 copay structure. You will stay in this catastrophic phase of coverage for the remainder of the calendar year for all your medications. Again, that means ALL your medications covered by your Medicare Part D plan will be $0 for the remainder of the year.

There may be a couple of different reasons that your medication suddenly got cheaper. Look at your receipt and that may help you to determine the reason. Also review your monthly statements you get from your Part D insurance that illustrates what your medications cost and how much you paid in the previous month.

Sometimes I hear people say they won’t take their medication because it costs too much, and that is NOT a good decision. You should work with your physician and your pharmacists to see if there are alternative, cheaper medications, or discount programs available.

In 2025 the Medicare Part D rules adjusts again and those individuals with a Medicare approved Part D plan will not pay more than $2000 in copays in a calendar year. So many more individuals with Medicare will pay less at the pharmacy than in 2024.

But this year, for those individuals who take expensive medication, the $0 copay in the Catastrophic Phase has made their life more affordable.

Janell Sluga is a Geriatric Care Manager helping seniors in our community access services and insurance. To reach her, please email editorial@post-journal.com.