In what order do the four prescription drug coverage stages occur?

The correct sequence of the four prescription drug coverage stages is Deductible, Initial Coverage, Coverage Gap, and Catastrophic Coverage.

Understanding each stage:

• Deductible Stage: This is the initial phase where the beneficiary must pay a certain amount out-of-pocket for their prescriptions before their drug plan starts to pay.

• Initial Coverage Stage: Following the deductible, beneficiaries enter this stage during which the plan covers a portion of the drug costs. The beneficiary also pays a copayment or coinsurance until they reach a specific spending limit.

• Coverage Gap (Donut Hole): Once the spending limit is reached, beneficiaries enter the coverage gap, where they may pay a higher percentage of their drug costs until they reach the threshold for the next stage.

• Catastrophic Coverage: In this final stage, once the out-of-pocket costs exceed a certain threshold, the beneficiary pays a reduced amount for medications, and the plan covers most of the remaining costs.

This sequence is essential for understanding how drug coverage works and how costs are managed within a typical Medicare Part D plan. Each stage has distinct financial responsibilities for the beneficiary and different levels of coverage provided by the plan.