Older descriptions of four Part D coverage phases are outdated. Since 2025, the standard benefit has three stages: a deductible stage, initial coverage and catastrophic coverage. The separate coverage-gap stage was removed. This article explains insurance rules, not treatment choices.
How the stages work
| Stage | What to check |
|---|---|
| Deductible | Whether your plan has one and which covered costs are subject to it |
| Initial coverage | The plan's applicable copayments or coinsurance |
| Catastrophic coverage | After the annual Part D out-of-pocket threshold, no cost sharing for covered Part D benefits for the rest of the year |
Use the right year's amounts
For 2026, the standard deductible is $615 and the annual out-of-pocket threshold is $2,100. Medicare.gov lists a $700 maximum deductible and a $2,400 threshold for 2027. Some plans have a lower deductible or no deductible. Premiums and non-covered expenses do not count toward the threshold. Confirm the correct year in your plan documents.
Review the full plan rules
A formulary lists covered items and may include prior authorization, quantity limits or step-therapy requirements. Pharmacy networks and preferred cost sharing can also affect what you pay. Check these details securely with the plan rather than assuming every item is covered.
Keep a comparison record
- Save the plan name, year and Summary of Benefits.
- Ask what counts toward your annual threshold.
- Review the plan's Explanation of Benefits for progress through the stages.
- Ask about Extra Help or payment options if costs are difficult to manage.
Do not change treatment based on an insurance article. Direct clinical questions to your healthcare professional and coverage questions to your plan.
Continue with a related question
- Medicare Annual Open Enrollment: A Practical Review
- Medicare Premiums, Deductibles and Medical Cost Sharing
- Medicare Savings Programs: Where to Start