Catastrophic Coverage

Once you leave the coverage gap, which occurs once you have spent more than $4,950 in out-of-pocket costs for covered prescription drugs in 2017, you enter catastrophic coverage. This is a certain stage of Medicare Part D coverage when you only have to pay a relatively small co-payment or coinsurance amount and your health plan will cover the rest of the cost.

Once Ann spent more than $4,950 to pay for her covered prescription drugs, she was relieved to leave the coverage gap and enter catastrophic coverage, where she paid far less.