Medicare Prescription Drug Benefit Program (Plans)

20202020 Part D EOB Exhibit C

EXHIBIT C. Examples that show different versions of Section 2 (drug payment stages)

NOTE: The examples in this exhibit are fictional. They have been designed to illustrate some of the main variations in model language for Section 2 of the Model Part D Explanation of Benefits (EOB). These examples use numbers for the year 2020. For ease of illustration, the amounts for out-of-pocket costs and total drug costs have been rounded.

PART 1. Examples 1-4: non-LIS, with a deductible and limited gap coverage 3

[Example 1: non-LIS, with a deductible and limited gap coverage, in the yearly deductible stage] 4

[Example 2: non-LIS, with a deductible and limited gap coverage, in the Initial Coverage Stage] 6

[Example 3: non-LIS, with a deductible and limited gap coverage, in the Coverage Gap] 8

[Example 4: non-LIS, with a deductible and limited gap coverage, in Catastrophic Coverage] 10

PART 2. Example 5: non-LIS, no deductible and no gap coverage 12

[Example 5: non-LIS, no deductible and no additional gap coverage, in the Initial Coverage Stage] 13

PART 3. Example 6: non-LIS, brand-name/tier level only deductible and no gap coverage 15

[Example 6: non-LIS, brand-name/tier level only deductible and no gap coverage, in the Initial Coverage Stage] 16

PART 4. Examples 7-9: partial LIS, with a deductible 18

[Example 7: partial LIS, with a deductible, in the Yearly deductible stage] 19

[Example 8: partial LIS, with a deductible, in the Initial Coverage Stage] 21

[Example 9: partial LIS, with a deductible, in Catastrophic Coverage] 22

PART 5. Example 10: full LIS, in a plan that has a deductible 23

[Example 10: full LIS, in a plan with a deductible, in the Initial Coverage Stage] 24

PART 1. Examples 1-4: non-LIS, with a deductible and limited gap coverage

(these examples begin on the next page)

[Example 1: non-LIS, with a deductible and limited gap coverage, in the yearly deductible stage]

SECTION 2. Which “drug payment stage” are you in?

As shown below, your Part D prescription drug coverage has “drug payment stages.” How much you pay for a covered Part D prescription depends on which payment stage you are in when you fill it. During the calendar year, whether you move from one payment stage to the next depends on how much is spent for your drugs.

You are in this stage:
STAGE 1 Yearly Deductible You begin in this payment stage when you fill your first prescription of the calendar year. During this stage, you (or others on your behalf) pay the full cost of your drugs. You generally stay in this stage until you (or others on your behalf) have paid $415 for your drugs ($415 is the amount of your deductible). As of 01/31/20 you (or others on your behalf) have paid $200 for your drugs.		STAGE 2 Initial Coverage During this payment stage, the plan pays its share of the cost of your drugs and you (or others on your behalf) pay your share of the cost. You generally stay in this stage until the amount of your year-to-date “total drug costs” (see Section 3) reaches $3,820. When this happens, you move to payment stage 3, Coverage Gap.		STAGE 3 Coverage Gap During this payment stage, you (or others on your behalf) receive a 70% manufacturer’s discount on covered brand name drugs and the plan will cover [insert if additional brand gap coverage: “at least”] another 5%, so you will pay [insert if additional brand gap coverage: “less than”] 25% of the negotiated price on brand-name drugs. In addition you (or others on your behalf) pay [insert if additional generic gap coverage: “less than”] 37% of the costs of generic drugs. You generally stay in this stage until the amount of your year-to-date “out-of-pocket costs” (see Section 3) reaches $5,100. When this happens, you move to payment stage 4, Catastrophic Coverage.		STAGE 4 Catastrophic Coverage During this payment stage, the plan pays most of the cost for your covered drugs. You generally stay in this stage for the rest of the calendar year (through December 31, 2020).
What happens next?
Once you (or others on your behalf) have paid an additional $215 for your drugs, you move to the next payment stage (stage 2, Initial Coverage).

[Example 2: non-LIS, with a deductible and limited gap coverage, in the Initial Coverage Stage]

SECTION 2. Which “drug payment stage” are you in?

As shown below, your Part D prescription drug coverage has “drug payment stages.” How much you pay for a covered Part D prescription depends on which payment stage you are in when you fill it. During the calendar year, whether you move from one payment stage to the next depends on how much is spent for your drugs.

		You are in this stage:
STAGE 1 Yearly Deductible You begin in this payment stage when you fill your first prescription of the year. During this stage, you (or others on your behalf) pay the full cost of your drugs. You generally stay in this stage until you (or others on your behalf) have paid $415 for your drugs ($415 is the amount of your deductible). Then you move to payment stage 2, Initial Coverage.		STAGE 2 Initial Coverage During this payment stage, the plan pays its share of the cost of your drugs and you (or others on your behalf) pay your share of the cost. You generally stay in this stage until the amount of your year-to-date “total drug costs” reaches $3,820. As of 4/30/20, your year-to-date “total drug costs” were $1,900. (See definitions in Section 3.)		STAGE 3 Coverage Gap During this payment stage, you (or others on your behalf) receive a 70% manufacturer’s discount on covered brand name drugs and the plan will cover [insert if additional brand gap coverage: “at least”] another 5%, so you will pay [insert if additional brand gap coverage: “less than”] 25% of the negotiated price on brand-name drugs. In addition you (or others on your behalf) pay [insert if additional generic gap coverage: “less than”]37% of the costs of generic drugs. You generally stay in this stage until the amount of your year-to-date “out-of-pocket costs” (see Section 3) reaches $5,100. When this happens, you move to payment stage 4, Catastrophic Coverage.		STAGE 4 Catastrophic Coverage During this payment stage, the plan pays most of the cost for your covered drugs. You generally stay in this stage for the rest of the calendar year (through December 31, 2020).
		What happens next?
		Once you have an additional $1,920 in “total drug costs,” you move to the next payment stage (stage 3, Coverage Gap).

[Example 3: non-LIS, with a deductible and limited gap coverage, in the Coverage Gap]

SECTION 2. Which “drug payment stage” are you in?

As shown below, your Part D prescription drug coverage has “drug payment stages.” How much you pay for a covered Part D prescription depends on which payment stage you are in when you fill it. During the calendar year, whether you move from one payment stage to the next depends on how much is spent for your drugs.

				You are in this stage:
STAGE 1 Yearly Deductible You begin in this payment stage when you fill your first prescription of the year. During this stage, you (or others on your behalf) pay the full cost of your drugs. You generally stay in this stage until you (or others on your behalf) have paid $415 for your drugs ($415 is the amount of your deductible). Then you move to payment stage 2, Initial Coverage.		STAGE 2 Initial Coverage During this payment stage, the plan pays its share of the cost of your drugs and you (or others on your behalf) pay your share of the cost. You generally stay in this stage until the amount of your year-to-date “total drug costs” reaches $3,820. Then you move to payment stage 3, Coverage Gap.		STAGE 3 Coverage Gap During this payment stage, you (or others on your behalf) receive a 70% manufacturer’s discount on covered brand name drugs and the plan will cover [insert if additional brand gap coverage: “at least”] another 5%, so you will pay [insert if additional brand gap coverage: “less than”] 25% of the negotiated price on brand-name drugs. In addition you (or others on your behalf) pay [insert if additional generic gap coverage: “less than”] 37% of the costs of generic drugs. You generally stay in this stage until the amount of your year-to-date “out-of-pocket costs” reaches $5,100. As of 08/31/20 your year-to-date “out-of-pocket costs” were $3,200 (see Section 3).		STAGE 4 Catastrophic Coverage During this payment stage, the plan pays most of the cost for your covered drugs. You generally stay in this stage for the rest of the calendar year (through December 31, 2020).
				What happens next?
				Once you (or others on your behalf) have paid an additional $1,900 in “out-of-pocket costs,” you move to the next payment stage (stage 4, Catastrophic Coverage).

[Example 4: non-LIS, with a deductible and limited gap coverage, in Catastrophic Coverage]

SECTION 2. Which “drug payment stage” are you in?

As shown below, your Part D prescription drug coverage has “drug payment stages.” How much you pay for a covered Part D prescription depends on which payment stage you are in when you fill it. During the calendar year, whether you move from one payment stage to the next depends on how much is spent for your drugs.

						You are in this stage:
STAGE 1 Yearly Deductible You begin in this payment stage when you fill your first prescription of the year. During this stage, you (or others on your behalf) pay the full cost of your drugs. You generally stay in this stage until you (or others on your behalf) have paid $415 for your drugs ($415 is the amount of your deductible). Then you move to payment stage 2, Initial Coverage.		STAGE 2 Initial Coverage During this payment stage, the plan pays its share of the cost of your drugs and you (or others on your behalf) pay your share of the cost. You generally stay in this stage until the amount of your “total drug costs” reaches $3,820. Then you move to payment stage 3, Coverage Gap.		STAGE 3 Coverage Gap During this payment stage, you (or others on your behalf) receive a 70% manufacturer’s discount on covered brand name drugs and the plan will cover [insert if additional brand gap coverage: “at least”] another 5%, you will pay [insert if additional brand gap coverage: “less than”] 25% of the negotiated price on brand-name drugs. In addition you (or others on your behalf) pay [insert if additional generic gap coverage: “less than”] 37% of the costs of generic drugs. You generally stay in this stage until the amount of your “out-of-pocket costs” reaches $5,100. When you move to payment stage 4, Catastrophic Coverage.		STAGE 4 Catastrophic Coverage During this payment stage, the plan pays most of the cost for your covered drugs. For each prescription, you pay whichever of these is larger: a payment equal to 5% of the cost of the drug (this is called “coinsurance”), or a copayment ($3.40 for a generic drug or a drug that is treated like a generic, $8.50 for all other drugs).
						What happens next?
						You generally stay in this payment stage, Catastrophic Coverage, for the rest of the calendar year (through December 31, 2020).

PART 2. Example 5: non-LIS, no deductible and no gap coverage

(this example is on the next page)

[Example 5: non-LIS, no deductible and no additional gap coverage, in the Initial Coverage Stage]

SECTION 2. Which “drug payment stage” are you in?

As shown below, your Part D prescription drug coverage has “drug payment stages.” How much you pay for a covered Part D prescription depends on which payment stage you are in when you fill it. During the calendar year, whether you move from one payment stage to the next depends on how much is spent for your drugs.

		You are in this stage:
STAGE 1 Yearly Deductible (Because there is no deductible for the plan, this payment stage does not apply to you.)		STAGE 2 Initial Coverage You begin in this payment stage when you fill your first prescription of the year. During this stage, the plan pays its share of the cost of your drugs and you (or others on your behalf) pay your share of the cost. You generally stay in this stage until the amount of your year-to-date “total drug costs” reaches $3,820. As of 4/30/20, your year-to-date “total drug costs” were $1,900. (See definitions in Section 3.)		STAGE 3 Coverage Gap During this payment stage, you (or others on your behalf) receive a 70% manufacturer’s discount on covered brand name drugs and the plan will cover another 5%, so you will pay 25% of the negotiated price on brand-name drugs. In addition you (or others on your behalf) pay 37% of the costs of generic drugs. You generally stay in this stage until the amount of your year-to-date “out-of-pocket costs” (see Section 3) reaches $5,100. Then you move to payment stage 4, Catastrophic Coverage.		STAGE 4 Catastrophic Coverage During this payment stage, the plan pays most of the cost for your covered drugs. You generally stay in this stage for the rest of the calendar year (through December 31, 2020).
		What happens next?
		Once you have an additional $1,920 in “total drug costs,” you move to the next payment stage (stage 3, Coverage Gap).

PART 3. Example 6: non-LIS, brand-name/tier level only deductible and no gap coverage

(this example is on the next page)

[Example 6: non-LIS, brand-name/tier level only deductible and no gap coverage, in the Initial Coverage Stage]

SECTION 2. Which “drug payment stage” are you in?

As shown below, your Part D prescription drug coverage has “drug payment stages.” How much you pay for a covered Part D prescription depends on which payment stage you are in when you fill it. During the calendar year, whether you move from one payment stage to the next depends on how much is spent for your drugs.

		You are in this stage:
STAGE 1 Yearly Deductible During this payment stage, you (or others on your behalf) pay the full cost of your brand-name (or tier 3) drugs. You generally pay full cost of your brand-name (or tier 3) drugs until you (or others on your behalf) have paid $415 for your brand-name (or tier 3) drugs ($415 is the amount of your brand-name (or tier 3) deductible).		STAGE 2 Initial Coverage During this payment stage, the plan pays its share of the cost of your generic (or tier 1 and tier 2) drugs and you (or others on your behalf) pay your share of the cost. After you (or others on your behalf) have met your brand-name (or tier 3) deductible, the plan pays its share of the cost of your brand-name (or tier 3) drugs and you (or others on your behalf) pay your share of the cost. You generally stay in this stage until the amount of your year-to-date “total drug costs” reaches $3,820. As of 4/30/20, your year-to-date “total drug costs” were $1,900. (See definitions in Section 3.)		STAGE 3 Coverage Gap During this payment stage, you (or others on your behalf) receive a 70% manufacturer’s discount on covered brand name drugs and the plan will cover another 5%, so you will pay 25% of the negotiated price on brand-name drugs. In addition you (or others on your behalf) pay 37% of the costs of generic drugs. You generally stay in this stage until the amount of your year-to-date “out-of-pocket costs” (see Section 3) reaches $5,100. Then you move to payment stage 4, Catastrophic Coverage.		STAGE 4 Catastrophic Coverage During this payment stage, the plan pays most of the cost for your covered drugs. When you are in this stage, you generally stay in it for the rest of the calendar year (through December 31, 2020).
		What happens next?
		Once you have an additional $1,920 in “total drug costs,” you move to the next payment stage (stage 3, Coverage Gap).

PART 4. Examples 7-9: partial LIS, with a deductible

(these examples begin on the next page)

[Example 7: partial LIS, with a deductible, in the Yearly deductible stage]

SECTION 2. Which “drug payment stage” are you in?

As shown below, your Part D prescription drug coverage has “drug payment stages.” How much you pay for a covered Part D prescription depends on which payment stage you are in when you fill it. During the calendar year, whether you move from one payment stage to the next depends on how much is spent for your drugs.

You are in this stage:
STAGE 1 Yearly Deductible You begin in this payment stage when you fill your first prescription of the year. During this stage, you (or others on your behalf) pay the full cost of your drugs. You generally stay in this stage until you (or others on your behalf) have paid $85 for your drugs. (The plan deductible is usually $415, but you pay $85 because you are receiving “Extra Help” from Medicare.) As of 05/31/20 you have paid $50 for your drugs.		STAGE 2 Initial Coverage During this payment stage, the plan pays its share of the cost of your drugs and you (or others on your behalf, including “Extra Help” from Medicare) pay your share of the cost. You generally stay in this stage until the amount of your year-to-date “out-of-pocket costs” reaches $5,100. When this happens, you move to payment stage 4, Catastrophic Coverage.		STAGE 3 Coverage Gap (Because you are receiving “Extra Help” from Medicare, this payment stage does not apply to you.)		STAGE 4 Catastrophic Coverage During this payment stage, the plan pays most of the cost for your covered drugs. You generally stay in this stage for the rest of the calendar year (through December 31, 2020).
What happens next?
Once you (or others on your behalf) have paid an additional $35 for your drugs, you move to the next payment stage (stage 2, Initial Coverage).

[Example 8: partial LIS, with a deductible, in the Initial Coverage Stage]

SECTION 2. Which “drug payment stage” are you in?

As shown below, your Part D prescription drug coverage has “drug payment stages.” How much you pay for a covered Part D prescription depends on which payment stage you are in when you fill it. During the calendar year, whether you move from one payment stage to the next depends on how much is spent for your drugs.

		You are in this stage:
STAGE 1 Yearly Deductible You begin in this payment stage when you fill your first prescription of the year. During this stage, you (or others on your behalf) pay the full cost of your drugs. You generally stay in this stage until you (or others on your behalf) have paid $85 for your drugs ($85 is the amount of your deductible). Then you move to payment stage 2, Initial Coverage.		STAGE 2 Initial Coverage During this payment stage, the plan pays its share of the cost of your drugs and you (or others on your behalf, including “Extra Help” from Medicare) pay your share of the cost. You generally stay in this stage until the amount of your year-to-date “out-of-pocket costs” reaches $5,100. As of 08/31/20 your year-to-date “out-of-pocket costs” were $3,820 (see definitions in Section 3).		STAGE 3 Coverage Gap (Because you are receiving “Extra Help” from Medicare, this payment stage does not apply to you.)		STAGE 4 Catastrophic Coverage During this payment stage, the plan pays most of the cost for your covered drugs. You generally stay in this stage for the rest of the calendar year (through December 31, 2020).
		What happens next?
		Once you (or others on your behalf) have paid an additional $1,280 in “out-of-pocket costs” for your drugs, you move to the next payment stage (stage 4, Catastrophic Coverage).

[Example 9: partial LIS, with a deductible, in Catastrophic Coverage]

SECTION 2. Which “drug payment stage” are you in?

As shown below, your Part D prescription drug coverage has “drug payment stages.” How much you pay for a covered Part D prescription depends on which payment stage you are in when you fill it. During the calendar year, whether you move from one payment stage to the next depends on how much is spent for your drugs.

						You are in this stage:
STAGE 1 Yearly Deductible You begin in this payment stage when you fill your first prescription of the year. During this stage, you (or others on your behalf) pay the full cost of your drugs. You generally stay in this stage until you (or others on your behalf) have paid $85 ($85 is the amount of your deductible). Then you move to payment stage 2, Initial Coverage.		STAGE 2 Initial Coverage During this payment stage, the plan pays its share of the cost of your drugs and you (or others on your behalf, including “Extra Help” from Medicare) pay your share of the cost. You generally stay in this stage until the amount of your “out-of-pocket costs” reaches $5,100. Then you move to payment stage 4, Catastrophic Coverage.		STAGE 3 Coverage Gap (Because you are receiving “Extra Help” from Medicare, this payment stage does not apply to you.)		STAGE 4 Catastrophic Coverage During this stage, the plan pays most of the cost for your covered drugs. For each prescription, you pay up to $3.40 for a generic drug or a drug that is treated like a generic, and $8.50 for all other drugs.
						What happens next?
						You generally stay in this payment stage, Catastrophic Coverage, for the rest of the calendar year (through December 31, 2020).

PART 5. Example 10: full LIS, in a plan that has a deductible

The page that follows has an example that illustrates what the drug payment stages chart in Section 2 looks like for someone with full LIS who is in drug payment stage 2 (Initial Coverage). The purpose of this example is to show how the model language explains the absence of a deductible for someone with full LIS who is in a plan that has a deductible.

(this example is on the next page)

[Example 10: full LIS, in a plan with a deductible, in the Initial Coverage Stage]

SECTION 2. Which “drug payment stage” are you in?

As shown below, your Part D prescription drug coverage has “drug payment stages.” How much you pay for a covered Part D prescription depends on which payment stage you are in when you fill it. During the calendar year, whether you move from one payment stage to the next depends on how much is spent for your drugs.

		You are in this stage:
STAGE 1 Yearly Deductible (Because you are receiving “Extra Help” from Medicare, this payment stage does not apply to you.)		STAGE 2 Initial Coverage You begin in this payment stage when you fill your first prescription of the year. During this stage, the plan pays its share of the cost of your drugs and you (or others on your behalf, including “Extra Help” from Medicare) pay your share of the cost. You generally stay in this stage until the amount of your year-to-date “out-of-pocket costs” reaches $5,100. As of 08/31/20 your year-to-date “out-of-pocket costs” were $3,820 (see definitions in Section 3).		STAGE 3 Coverage Gap (Because you are receiving “Extra Help” from Medicare, this payment stage does not apply to you.)		STAGE 4 Catastrophic Coverage During this payment stage, the plan pays for all your covered drugs. You generally stay in this stage for the rest of the calendar year (through December 31, 2020).
		What happens next?
		Once you (or others on your behalf) have paid an additional $1,280 in out-of-pocket costs for your drugs, you move to the next payment stage (stage 4, Catastrophic Coverage).

PRA Disclosure Statement According to the Paperwork Reduction Act of 1995, no persons are required to respond to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this collection is 0938-0964. The time required to complete this information collection is estimated to average 200 hours per response based on the time and effort necessary to disclose and disseminate plan information and materials. If you have any comments concerning the accuracy of the time estimate(s) or suggestions for improving this form, please write to CMS, 7500 Security Boulevard, Attn: PRA Reports Clearance Officer, Baltimore, Maryland 21244-1850.

CMS does not discriminate in its programs and activities: To request this form in an accessible format (e.g., Braille, Large Print, Audio CD) contact your Medicare Drug Plan. If you need assistance contacting your plan, call: 1-800-MEDICARE.

Form CMS-10141 OMB Control No. 0938-0964 (Expires 11/30/2021)