True Out-of-Pocket Costs or TrOOP

Medicare’s True Out-of-Pocket (TrOOP) costs refer to the amount a Medicare beneficiary pays for prescription drugs out-of-pocket in a given year. Once a beneficiary reaches the TrOOP limit, they enter a phase called catastrophic coverage.

The TrOOP limit is the sum of all out-of-pocket expenses paid by the beneficiary for prescription drugs during a given year, including the annual deductible, copayments, and coinsurance. It does not include the monthly premiums paid for Part D prescription drug coverage.

Once a beneficiary reaches the TrOOP limit, they only pay a small coinsurance or copayment amount for the rest of the year. The TrOOP limit is adjusted annually and for 2023, the TrOOP limit is $7,050 (an increase from $6,850 in 2022).

It’s important to note that not all drug costs count toward TrOOP. For example, drugs purchased outside of a Medicare Part D plan, drugs not covered by the plan, and drugs purchased during the coverage gap or donut hole phase do not count toward TrOOP.

Beneficiaries can track their TrOOP costs by reviewing their Explanation of Benefits (EOB) statement, which is sent by their Part D plan. It’s important to keep track of TrOOP costs to ensure that beneficiaries are getting the most out of their prescription drug coverage and to avoid paying more than necessary.