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.
For example, if you purchase a medication with a retail cost of $100 and your Medicare Part D plan pays $70 toward the prescription and you pay a $30 co-payment, the total retail value of $100 counts toward meeting your Initial Coverage Limit and moves you $100 closer to entering the Donut Hole.
The standard Initial Coverage Limit (entry point to the Coverage Gap or Donut Hole) can vary each year. In 2006, at the start of the Medicare Part D program, the Initial Coverage Limit was $2,250 and now the ICL has increased in 2019 to $3,820.
