What happens when a member surpasses the annual limit in a Medicare drug plan?

When a member surpasses the annual limit in a Medicare drug plan, they qualify for the catastrophic coverage phase. This phase is designed to provide additional financial protection for beneficiaries who have high prescription drug costs. After reaching the out-of-pocket spending threshold, members transition to this phase, where they benefit from reduced cost-sharing for prescription medications.

In catastrophic coverage, beneficiaries typically pay a significantly lower coinsurance or copayment for their drugs, allowing them to continue accessing necessary medications without the burden of high costs. This system is an essential aspect of Medicare drug plans, as it ensures that those with the highest healthcare needs can maintain access to their medications even after reaching their spending limits.

The other options do not accurately reflect the process for members who exceed their annual limit under a Medicare drug plan, focusing instead on the limitations or reversion to earlier coverage phases that do not apply in this scenario.