Exactly what is TrOOP (True Out-of-Pocket Costs)?

TrOOP refers to expenses that Part D plan enrollees must pay to fulfill the cost-sharing requirements needed to reach the Part D catastrophic benefit - the point at which the Part D plan pays 95% of prescription drug costs and the beneficiary pays 5%. These cost-sharing requirements include the annual plan deductible and all co-insurance or co-payments for drugs on the plan's formulary, but exclude the monthly plan premium. Part D plans are required to send monthly statements of benefits to enrollees; these statements should show the enrollee's TrOOP totals. 

Some sources of payment that count as TrOOP include the following:

• Beneficiary out-of-pocket payments for any annual deductible and any copayment or coinsurance amounts (including the entire cost of covered prescriptions while in the “doughnut hole”);
• Beneficiary spending using health savings accounts (HSAs), flexible spending accounts (FSAs), and medical savings accounts (MSAs);
• Contributions from friends or relatives;
• Contributions from certain charitable foundations;
• Waivers or reductions by pharmacies of the cost-sharing requirements of Medicare drug benefit plans; and payments by state-funded only programs such as state pharmacy assistance programs (SPAPs).

More information about TrOOP is available from HAP's fact sheet, What Is TrOOP?.

(Back to Questions about Cost-Sharing)