Case Flash:  True Out-of-Pocket (TrOOP) Costs and
Changing Medicare Part D Plans

Ms. N was getting her prescriptions covered through a stand-alone Part D plan that worked with her Original Medicare. Because she takes extremely expensive medications for rheumatoid arthritis and sleep apnea, by the end of January, Ms. N had spent enough out of pocket to reach her plan’s “catastrophic coverage” limit, which made her copays very low.

In February, Ms. N decided to move out of state to be closer to her family. She called 800-Medicare to ask whether her Part D plan would cover her after the move. The representative told her it would not. He then helped Ms. N choose a Part D plan in her new zip code that would cover all of her prescription drugs without restrictions. Ms. N asked the representative to enroll her in the plan effective March 1 st.

In mid-March, after moving, Ms. N went to fill a prescription at a pharmacy in the new plan’s network. She was surprised when the pharmacist said that she needed to pay a very high amount- her deductible and a large copay. Ms. N paid, but was upset that her costs were so much higher than what she had last been paying under her old plan.

Ms. N called the Medicare Rights Center and spoke with a hotline counselor. The hotline counselor told her that in all Part D plans, you reach catastrophic coverage when your out-of-pocket costs hit a certain amount, $4,350 in 2009. If you reach catastrophic coverage in one plan and then switch plans during the year, your balance is transferred and you should continue to pay catastrophic coverage copays until the end of the calendar year. You do not have to start paying your deductible and high copays again, but should continue to pay low copays.

The hotline counselor advised Ms. N to dispute the plan’s calculation of her TrOOP (“True Out of Pocket”) spending by filing a grievance (a written complaint submitted to the plan). The counselor advised Ms. N to explain in the grievance letter that she had already reached catastrophic coverage in her former plan, so she should also be in catastrophic coverage in the new plan. The counselor also encouraged Ms. N to gather her pharmacy receipts so she could request reimbursement for the amount she paid out of pocket. The plan is required to respond to the grievance within 30 days.

-Adapted from “Case Flash: True Out-Of-Pocket (TrOOP) Costs and Changing Part D Plans”, MEDICARE WATCH, a biweekly electronic newsletter of the Medicare Rights Center, Vol. 12 , No. 6: March 24, 2009.

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