How to Calculate TrOOP Medicare

TrOOP is an acronym used by Medicare, meaning True Out of Pocket. According to the Department of Health and Human Services, TrOOP is the threshold of coverage that determines when a person's catastrophic coverage will begin. Medicare sets an out-of-pocket limit of $4550 for prescription drugs. Each time you pay for your medicine, you will receive an explanation of benefits (EOB) detailing your TrOOP costs. To calculate this cost, you have to determine what payments count toward TrOOP costs, which payments are excluded and add the total cost after each eligible payment.

Things You'll Need

• Calculator
• Excel program (optional)

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Instructions

• 1

  Pay any out-of-pocket expenses for prescription drugs. These out-of-pocket costs are deductibles, co-insurances and co-payments, as well as any payment made during an insurance coverage gap. For the payments to count toward your TrOOP, the drug will have to be a covered drug. This means that if Medicare denies payment of the prescription as "non-covered" and you pay for it yourself, that payment will not be counted toward your TrOOP.

• 2

  Determine which payments are excluded from TrOOP deductions. Payments not included in calculation of TrOOP are prescription plan premiums, drugs purchased outside of the U.S. and over-the-counter drugs. In addition, if you have a secondary insurance or a third party group that pays for your prescription costs, you cannot count those payments in calculating your TrOOP. Also, if you purchased your prescriptions at an out-of-network pharmacy, you need to review your insurance plan's out-of-pocket policy to determine if this payment can be deducted.

• 3

  Calculate the total cost spent. As previously stated, the out-of-pocket limit for prescription drugs is $4550. When you receive your EOB, deduct the amount that you spent from the out-of-pocket limit. It may be helpful to develop a spreadsheet that will calculate this for you. If you have prescriptions filled frequently, you should be able to meet your out of pocket maximum quickly.