In 2022, you are facing higher out-of-pocket drug costs before you can qualify for catastrophic coverage. The out-of-pocket spending threshold will increase by $500, from $6,550 to $7,050 in 2021.

You will also face higher out-of-pocket costs in 2022 for the deductible and in the initial coverage phase before reaching the catastrophic coverage. The standard deductible is increasing from $445 in 2021 to $480 in 2022, while the initial coverage limit is increasing from $4,130 in 2021 to $4,430 in 2022.

For costs in the coverage gap phase, beneficiaries will pay 25% for both brand-name and generic drugs. Manufacturers provide a 70% discount on brands and plans pay the remaining 5% of costs for brand name drugs. Plans pay the remaining 75% of generic drug costs. For total drug costs above the catastrophic threshold, Medicare pays 80%, plans pay 15%, and enrollees pay either 5% of total drug costs or $3.95/$9.85 for each generic and brand-name drug, respectively.