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 2016 this amount is: $3,310
- The $3,310 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 45% of the full retail cost of covered brand name medications
- You will pay 58% 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 $4,850 for the year. This includes:
- The $3,310 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 $4,850 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
