The first stage occurs at the beginning of your prescription drug coverage. This is the period when you pay for your prescription drugs in full (reduced by the plans low negotiated rates) until you meet your yearly deductible amount. After the deductible is met, you move into the Initial Coverage stage.
Some plans do not have a yearly deductible. Under these plans, you would begin in the Before Gap or Initial Coverage stage.
In this phase, you will either pay a copay or coinsurance (a percentage of the drug’s cost) when you have a prescription filled. This phase lasts until you and your plan reach a total of $4,130 in 2021 drug spending, at which time you move into the Coverage Gap phase.
Often called the 'Donut Hole Phase', you will pay 25% of the plan's negotiated rate for a covered drug until your total out of pocket cost reaches $6,550 in 2021.
After you reach a total of $6,550 in 2021 in out-of-pocket prescription drug expenses, you will start paying a different copay or coinsurance for both generic and brand-name prescription drugs. In the Catastrophic Coverage phase, copays are typically lower than during the Initial Coverage phase. This phase lasts until the end of the plan year.