Only payments for drugs on your plan’s formulary count towards your out-of-pocket maximum, unless you have received an exception to the plan’s formulary. Medicare refers to these as True Out-of-Pocket (TrOOP) costs, and they are the costs that count toward getting out of the donut hole. Some examples of payments that DO count toward your out-of-pocket limits are:

  • Payments you make yourself, or that are
  •  Payments made by the Indian Health Service, an Indian tribe or tribal organization or an urban Indian organization. This was added by the health care reform law, the Affordable Care Act.
  • Payments made by a charitable organization that is not associated with an insurer, your employer or a pharmaceutical drug manufacturer.
  • Health savings, flexible spending or medical savings accounts.

Remember — only payments for drugs your plan covers (including any “exceptions” you receive) count toward the limits. Your out-of-pocket costs will be calculated by calendar year, and your drug plan will keep track of your expenses for you. If you change your drug plan, your old plan must transfer this information to your new plan.