Here is essential information you need to know about owning a prescription drug plan:

• Annual Deductible — There is a deductible you must pay for a Part D plan. Your deductible may be different or waived entirely, but the max amount you can be charged is $415 in 2019. You will pay a discounted price for your medications until you have satisfied the deductible. After that, you begin initial coverage.

• Initial Coverage — During initial coverage, you pay a copay for your medications based on your plan’s formulary. Each prescription drug plan separates its medications into tiers. Each tier has a copy amount for which you are responsible. It is typically separated by generic drugs, preferred name brands, specialized medications, etc. In 2019, the initial coverage cap is $3,820. After you and the insurance company have paid this amount, you enter the coverage gap.

• The Coverage Gap – During the coverage gap, you will still generally have significant discounts for generic medications. Typically, you will pay 25% for name-brand medications and 37% for generics. Your gap will continue until you spent $5100 out of your pocket in 2019.

• Catastrophic Coverage – If you should spend past the coverage gap, your plan will begin to pay 95% of the costs of your formulary medications for the rest of the year.