All amounts are based on 2021 costs. 

Medicare Part D is a program that the federal government organized in 2006. Those enrolled in a Part D plan receive discounts for their prescription drugs by joining a Prescription Drug Plan or a Medicare Advantage Plan. Here’s what you need to know about the four phases users will go through while using the Part D plan. 

Phase 1: The initial deductible – the IRS defines a high deductible health plan as any plan with a deductible of at least $1,400 for an individual or $2,800 for a family in 2021. (source)

Phase 2: Coverage – The plan provides you with co-insurance or medication co-payment. 

Phase 3: The Donut Hole – Once you reach the coverage gap, an amount that varies year to year, you pay 100% of your Medication costs.

Phase 4: Catastrophic Coverage – After you spend more than $6,550 (2021) for prescription medications, the cost of medications will be reduced.

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