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Understanding the Medicare Coverage Gap for 2017

The Medicare Coverage Gap or the “donut hole” is an important and often confusing term that you need to understand if you have a Medicare Prescription Drug Plan (PDP). If a person enters the Coverage Gap, the cost of their medications may increase. We have listed some important points to help you understand the Medicare Coverage Gap.

  • You enter the Medicare Coverage Gap after you and your prescriptions drug plan have spent a certain amount on drugs covered by your plan
    • For 2017 this amount is: $3,700
  • The $3,700 includes:
    • Your drug plan’s share of the full retail cost for covered drugs
    • Your deductible
    • Your copays and coinsurance
    • Your premium is NOT included in this “out of pocket” cost
  • When you enter the Medicare Coverage Gap in 2016 your costs will increase
    • You will pay 51% of the full retail cost of covered brand name medications
    • You will pay 41% of the full retail cost of covered generic medications
  • You remain in this coverage gap, or “donut hole”, until you and the drug plan have spent $4,950 for the year. This includes:
    • The $3,700 that you and the drug plan have already spent
    • The increased coverage gap costs that you pay
    • The discounted costs that the plan pays in the Coverage Gap
    • Once you and the drug plan have reached this $4,950 you will enter Catastrophic Coverage during which time you may pay a reduced copay or coinsurance

What if I can’t afford a Prescription Plan?

Medicare does provide Extra Help to some eligible recipients. Click here for information on receiving Extra Help

When will the Coverage Gap end?

Medicare is slated to close the Coverage Gap in 2020

What does this mean for PDP holders?

  • As the 2020 deadline approaches, you will begin to pay less and less during the gap phase
  • In 2020 and after, you will pay 25% of the negotiated retail cost on both generic and brand name medications that are covered by your plan for the entire year
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Client Testimonials

Understanding the Medicare Coverage Gap for 2017 | The Wooten Agency

  • "This is a family-owned business who cares about their potential clients. I was looking for help with health insurance and even though it turns out I don't need new health insurance at this time, I feel compelled to write a review because of how thorough Brendan was. He was very knowledgeable and easy-going. He didn't seem pushy at all and listened to everything I had to say. He made sure he was getting all the information correct. I would recommend this agency for any insurance needs." - Doug C.
  • "I sought help from Wooten Agency; Ed, along with Nancy, took the bull by the horns and sorted things out for us very quickly. Shortly thereafter Ginny took over. She is definitely most qualified as a plan selector for Medicare plans and issues related to Medicare. My appreciation to Crystal for the gracious way she always responds to telephone calls and makes every effort to ensure one is not forgotten. And Dana....the one contact we had was enough to find out you are similarly inclined to help a client." - Frank V.
  • "You [Aaron] have been so helpful, and you have all taken a personal interest in my individual and specific questions in order to make the best insurance choices for my needs. Thank you all! I look forward to working together in the future months and years." - Susan H.
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