Medicare Part D 'Donut Hole'
The 'Donut Hole' is a coverage gap
Most Medicare Part D drug plans have a coverage gap–also known as the "donut hole"–that limits what the drug plan will cover after a certain dollar amount is reached.
The good news: Pharmacies like Walgreens provide discounted prescriptions for Part D recipients in the coverage gap.
What do you need to do?
In the coverage gap: You'll need to pay your premiums and out-of-pocket drug costs from the time you meet your deductible (if your plan has one) until you reach catastrophic coverage. If you have a Medicare prescription drug plan that includes coverage in the gap, you may get a discount after your plan's coverage has been applied to the drug price. The discount for brand-name drugs will apply to the remaining amount you owe.
After the coverage gap: Once your costs exceed the coverage gap ($5,100 in 2019) you'll be in catastrophic coverage and responsible for 5% of your prescription drug costs for the rest of the year.
Brand-name vs. generic discounts
For covered brand-name prescription drugs, in 2019 you pay 25%, but the entire price counts as out-of-pocket costs, which helps you get out of the donut hole.
For generic prescription drugs, you'll pay 37% of the cost in 2019. With generic drugs, only the amount you pay counts towards getting you out of the donut hole.
Here's what counts towards the coverage gap:
- Your yearly deductible, coinsurance, and copayments
- The discount you get on brand-name drugs in the coverage gap
- What you pay in the coverage gap
Here's what doesn't count:
- Your drug plan premium
- The pharmacy dispensing fee
- What you pay for drugs that aren't covered
Who qualifies for these discounts?
You'll receive the discounts once you reach the coverage gap if:
- You are enrolled in a Medicare prescription drug plan or a Medicare Advantage plan that includes prescription drugs.
- You don't receive Extra Help, a Medicare program to help people with limited income.