The Initial Coverage Limit is the measured by the retail cost of your drug purchases and is used to determine when you leave your Medicare plan's Initial Coverage Phase and enter the Donut Hole or Coverage Gap portion of your Medicare Part D prescription drug plan.

What is an initial coverage limit for health insurance?

The Initial Coverage Limit (ICL) will go up from $4,130 in 2021 to $4,430 in 2022. This means you can purchase prescriptions worth up to $4,430 before entering what's known as the Medicare Part D Donut Hole, which has historically been a gap in coverage.

What does initial coverage stage mean?

Initial Coverage

Your plan pays for a portion of each prescription drug you purchase, as long as that medication is covered under the plan's formulary (list of covered drugs). You pay the other portion, which is either a copayment (a set dollar amount) or coinsurance (a percentage of the drug's cost).