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How to Understand Your True Out-of-Pocket Limit (TrOOP) for Medicare Part D
Reviewed by John Krahnert
Your true out-of-pocket limit (TrOOP) for Medicare Part D is an important threshold that affects what you’ll owe for prescription medications. Learn what expenses count toward TrOOP and what happens once you reach this limit.
When you have a standalone Medicare Part D prescription drug plan or a Medicare Advantage (Medicare Part C) plan that includes Part D drug coverage, you also have what’s called a true out-of-pocket limit (otherwise known as TrOOP).
TrOOP is the maximum out-of-pocket amount your Medicare Prescription Drug Plan will pay. It's important because it regulates the amount you’ll spend through your drug plan each year. Understanding how TrOOP works can help you plan ahead financially and give you peace of mind.
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What is TrOOP in Medicare?
In 2025, the amount necessary to meet the TrOOP threshold is $2,000.The TrOOP limit is the point at which your Medicare Part D catastrophic coverage begins. Once you enter catastrophic coverage, you don’t pay a copayment for covered drugs for the remainder of the year.
How does TrOOP actually work?
With Medicare Part D, you’ll move through various coverage phases during which you’ll owe different amounts for your prescription drugs. TrOOP ultimately helps limit those payments, making it easier for you to afford your medications and take them as prescribed.
In the first Part D coverage state, you’ll typically pay 100% of your prescription drugs costs until you meet your Medicare Part D deductible. This amount varies from plan to plan but cannot be more than $590 in 2025.
Once you meet your plan’s deductible, you’ll pay a copayment or coinsurance for your covered drugs, and Medicare Part D pays for rest for prescription drugs included on your plan’s formulary (list of covered medications).
After you and your Medicare Part D plan have jointly spent $2,000, you move into the Part D catastrophic coverage phase. When January 1 comes along, your Medicare Part D plan resets, and you’ll move through each of these phases again.
What counts toward my TrOOP limit?
The biggest expenses you’ll pay that count toward TrOOP are your annual deductible, coinsurance costs and copayments. However, in some cases, TrOOP also includes payments made by drug manufacturers and your Medicare Part D plan.
In addition, TrOOP includes payments made through the Medicare Extra Help program or by Indian Health Service, AIDS drug assistance programs, most charities and most State Pharmaceutical Assistance Programs. Therefore, it makes sense to explore what resources and options are available to you because the amounts paid can help offset the costs you pay directly.
What doesn’t count toward my TrOOP limit?
Medicare Part D premium payments and pharmacy dispensing fees don’t count toward your TrOOP limit. TrOOP also doesn’t include what you pay for drugs that aren’t covered by your plan (unless you’re able to receive a formulary exception) as well as payments made for your drugs by employer or union health plans, TRICARE, VA, Worker’s Compensation, and some other programs.
What if I need additional assistance paying for prescription drugs?
There are various proactive steps you can take to help you afford the cost of your prescription medications. For example, you can ask your doctor if you can switch to generic medications or other lower-cost drugs.
You can also apply for the Medicare Extra Help program that provides help to people with limited income and resources. Other resources include State Pharmaceutical Assistance Programs and Pharmaceutical Assistance Programs that pharmaceutical companies provide.
You can also review local prescription drug assistance programs. And a licensed insurance agent can help you compare your Medicare prescription drug plan options so you can find a plan that covers your drugs and meets your budget needs.
About the author
Lisa Eramo is an independent health care writer whose work appears in the Journal of the American Health Information Management Association, Healthcare Financial Management Association, For The Record Magazine, Medical Economics, Medscape and more.
..Lisa Eramo is an independent health care writer whose work appears in the Journal of the American Health Information Management Association, Healthcare Financial Management Association, For The Record Magazine, Medical Economics, Medscape and more.
Lisa studied creative writing at Hamilton College and obtained a master’s degree in journalism from Northeastern University. She is a member of the American Health Information Management Association, American Academy of Professional Coders, Society of Professional Journalists, Association of Health Care Journalists and the American Society of Journalists and Authors.
Lisa currently resides in Cranston, Rhode Island with her wife and two-year-old twin boys.
Website: LisaEramo.com
LinkedIn: Lisa Eramo
Twitter: @Lisa_Eramo
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