Medicare Donut Hole: Part D Coverage Gap Explained

Medicare Part D Coverage Gap, also known as the Medicare Donut Hole, is a specific time you may be eligible for catastrophic drug coverage.

The coverage gap starts after you pass your out-of-pocket expenses and into the next coverage gap. It refers to the amount of donuts left after you pay for your FDA-approved drugs.

The coverage gap period is temporary in which the expenses for covered prescription medication used by patients are not paid by their Medicare Part D plan.

The point of the coverage gap is to make it impossible for Medicare patients to get their medication without paying a large part of the cost.

Patients with prescription drug coverage will not have to pay anything out of pocket for medications filled during the coverage gap.

What Happens When You’re In The Donut Hole?

If you’re in the coverage gap phase, or, as it’s commonly known, the donut hole, you’ll pay a higher share of your prescription drug costs.

The donut hole begins after you and your plan have spent $4,660 on prescription drugs.

You then pay 25% of the cost of the drug and 25% of the dispensing fee, or dispensing copay, for each of the following brand-name drugs you purchase and 25% for generics.

Is The Medicare Part D Donut Hole Going Away?

No. The donut hole will not disappear once you’ve reached the coverage gap phase.

It will remain in place until a patient, usually after years, meets another deductible and has paid for all their prescriptions.

After that point, patients have unlimited coverage for drugs covered by Medicare Part D.

The donut hole is paid for by an increasing beneficiary premium owed to the government and is not included in your monthly Medicare bill.

How Do I Get Out Of The Donut Hole?

You can get out of the coverage gap if you and your plan have spent $7,400 on prescription drugs.

After you and your plan have spent that amount, you will have all your covered drugs paid for.

Between getting out of the coverage gap and reaching the catastrophic phase, there are no out-of-pocket costs for covered drugs for beneficiaries.

Paying your share of the cost during donut hole: The coverage gap is designed to make you pay more during this phase.

To help with this, you can choose a different plan from one you already have or change your current one so that it provides a lower monthly premium but has a higher deductible and therefore covers more or less prescription costs.

Also, it is important to know that you can get a discount on prescription drugs if you are a member of a Medicare drug discount program.

Tips For Navigating The Part D Coverage Gap

Shop Around For Your Drug Coverage

While you’re in the coverage gap, shopping around for a better plan is crucial.

You may be able to find a plan that provides more coverage, which will put you into the donut hole sooner and out of it faster.

However, if you choose one with fewer prescription drugs on its formulary, then your prescriptions might not be covered at all, and you could have a balance due for medication every time you go to the pharmacy.

Opt For Generic Over Brand-name Drugs Where Possible

The price difference between generic and brand-name drugs increases the closer you get to the donut hole.

Brand-name drugs are more expensive and often only have one generic drug available, meaning you’re stuck with a more expensive medication.

Explore Options For Getting Your Prescriptions That May Offer Discounted Prices

There are options for obtaining prescriptions that may reduce the copay. If you take all your prescriptions at the same pharmacy, you can get a filling or insurance card to reduce the cost.

You could also visit alternate pharmacies that offer cheaper prices. Some pharmacies also have free clinics where you can find a lower rate on your medication.

Look For Programs That Cover Your Medications Without Making You Pay Every Time

If you’re in the coverage gap and have no copayment in your plan, do not assume it is only because of budget cuts.

There may be ways to get your medication without paying copayment on every prescription.

Choose An Alternate Pharmacy

Mid-tier pharmacies sometimes have cheaper prices than big-name pharmacies in the area. It may be worth the extra drive to save money.

Consider Markups

If you have a choice between brands, look at the markup on each, and then pick the one with the lowest cost.

If you’re concerned that your prescription will be hard to find at a pharmacy, ask your doctor or pharmacist if they can call in a prescription for you. If they can’t, they should be able to refer you to someone who can. 

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