What Counts Toward TrOOP: How Medicare Part D Calculates Your Out-of-Pocket Costs

Your parent hit $1,800 in pharmacy costs and you're expecting the $2,100 out-of-pocket cap to kick in any day. But the plan's Explanation of Benefits shows only $1,200 in TrOOP. Something isn't adding up — and the gap is almost always manufacturer discounts that look like out-of-pocket spending but don't count.

What TrOOP Means and Why It Matters

TrOOP stands for True Out-of-Pocket costs. It's the specific counter Medicare uses to determine when your parent reaches the annual out-of-pocket cap — $2,100 in 2026, rising to $2,400 in 2027. Once TrOOP hits that cap, your parent's cost-sharing drops to $0 for covered drugs for the rest of the calendar year.

The catch: not every dollar spent on prescriptions counts toward TrOOP. Medicare applies strict rules about what qualifies.

What Counts Toward TrOOP

These payments push your parent closer to the $2,100 cap:

• Your parent's own payments — deductible costs, copays, and coinsurance paid out of pocket at the pharmacy
• Payments from a State Pharmaceutical Assistance Program (SPAP) — if your parent receives help from a state prescription drug program, those payments count toward TrOOP
• Payments made by the Extra Help (Low-Income Subsidy) program — federal Extra Help payments count toward the cap
• Payments from qualified charitable organizations — Patient Assistance Foundations registered with CMS that make payments on behalf of the beneficiary
• Payments from family members or friends — if you personally pay your parent's pharmacy copay, that counts

What Does NOT Count Toward TrOOP

This is where families get blindsided:

• Manufacturer discounts under the Medicare Manufacturer Discount Program. Since January 2025, manufacturers provide a 10% discount on brand-name drugs during the initial coverage phase and a 20% discount during the catastrophic phase. These discounts lower the total drug cost — but they do not count toward your parent's TrOOP. The discount benefits the plan, not the beneficiary's progress toward the cap.
• The plan's share of drug costs. The 75% the plan pays during the initial coverage phase (where your parent pays 25% coinsurance) does not count.
• Payments for drugs not on the plan's formulary. If your parent pays full retail for a non-covered drug, none of that counts.
• Costs at out-of-network pharmacies. If your parent fills a prescription at a pharmacy outside the plan's network, the payment typically doesn't count toward TrOOP or the deductible.
• Premiums. Monthly Part D premiums never count toward out-of-pocket spending.

How to Track TrOOP Accurately

Your parent's plan is required to provide TrOOP tracking on every Explanation of Benefits (EOB) statement. Look for the line labeled "True Out-of-Pocket Costs" or "TrOOP accumulator." You can also check the running total by:

1. Logging into the plan's online member portal
2. Calling the plan's member services number on the back of the insurance card
3. Checking each monthly EOB for the cumulative TrOOP amount

If the number seems wrong, request an itemized TrOOP accounting from the plan. Plans sometimes miscategorize manufacturer discounts as beneficiary payments, inflating the TrOOP total — and sometimes they make the opposite error, undercounting legitimate payments and delaying when your parent reaches the cap.

The M3P Wrinkle

If your parent is enrolled in the Medicare Prescription Payment Plan (M3P), the TrOOP calculation works the same — the amounts billed through M3P count toward the $2,100 cap based on the actual drug cost-sharing incurred, not when the monthly payment is made. Your parent's TrOOP accumulates as pharmacy costs are incurred, even though the bills arrive spread across the year.

For a complete worksheet that tracks each prescription's contribution to TrOOP across the plan year, the Medicare Part D: How to Choose a Drug Plan guide includes a medication audit and cost-tracking tool designed specifically for caregivers managing a parent's Part D spending.

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