 Once the beneficiary reaches the Out-of-Pocket Threshold, he/she becomes eligible for catastrophic coverage.During catastrophic coverage, he or she pays the greater of 5% coinsurance, or $2.65 for generic drugs and $6.60 for brand-name drugs.The catastrophic coverage amount is calculated on a yearly basis and a beneficiary who reaches catastrophic coverage by the end of the benefit year will start his or her deductible anew at the beginning of the next benefit year.