Medicare Part D 'Donut Hole'
The 'Donut Hole' is a Coverage Gap
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 ($5,000 in 2018) 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 2018 you pay 35%, 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 44% of the cost in 2018. 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.