Fun With Medicare Part D!

I came up with this story problem to demonstrate how complicated it is to understand the Medicare Part D prescription plan, which many of our seniors deal with every day.

Carl has a medicare part D plan with no deductible. Part D covers drugs up to $2400 in total retail cost (rxspend). When you reach $2400 you enter the coverage gap where you pay for drugs at 100% of the cost. You get out of the gap and reach catastophic protection when you reach $3850 in true out of pocket costs (TROoP), what you have paid only. The plan pays $95% of the total drug cost in catastrophic.

1) If Carl has a monthly retail cost of $400, which month will he reach the coverage gap in if his plan begins in Jan? In April?


2) If Carl has a monthly retail cost of $950, of which $200 each month is copays in initial coverage, in which month will he reach catastophic protection?


3) If Carl's monthly retail cost is $950, of which $200 per month is copays in initial coverage, what will be his total retail cost (Rxspend) at the end of the year?


Answers:
1. Jan = July, April = October
2. July
3. Rxspend = $4135