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What is the Medicare Coverage Gap? (AKA “Donut Hole”)

The Medicare coverage gap is the phase of your Medicare Part D benefit when there is a gap in prescription drug coverage. You might not reach this stage at all; it starts if you and your plan spend a certain amount of money within a year, as described below. During this phase, you may have to pay more for your drugs, until you reach the catastrophic coverage phase. Note that some plans don’t include this coverage gap.

Most Medicare Advantage Prescription Drug plans and Medicare Prescription Drug Plans have a coverage gap, or “donut hole.” The coverage gap is reached when your total drug costs (what you and your plan pay) reach a certain amount ($3,700 in 2017). You then pay for a certain portion of prescription drug costs out-of-pocket until entering the plan’s catastrophic coverage phase. This is when your total out-of-pocket costs, including the annual deductible and copayments/coinsurance, reach $4,950 in 2017.

Some Medicare Advantage Prescription Drug plans and stand-alone Medicare Prescription Drug Plans provide partial or full coverage during the coverage gap. For example, some plans may not have a gap at all, while others may offer generic drug coverage in the gap. Plans with gap coverage often charge a higher monthly premium, so you may only want to consider one of these plans if you have high drug costs and expect to reach the coverage gap.

How does the Affordable Care Act affect the coverage gap?

Until 2020, when the coverage gap will be closed, you’ll pay gradually less for both generic and brand-name medications.

  • In 2017, you’ll pay 40% for brand-name drugs and 51% for generic drugs.
  • In 2018, you’ll pay 35% for brand-name drugs and 44% for generic drugs.
  • In 2019, you’ll pay 30% for brand-name drugs and 37% for generic drugs.
  • In 2020, you’ll pay 25% for brand-name drugs and 25% for generic drugs.

Medicare Part D is the trickiest part of Medicare coverage! People unknowingly, and, in many cases, UN- NECESSARILY spend hundreds more (sometimes thousands) for prescriptions or prescription coverage by NOT reviewing their coverage EVERY year! If you are taking ANY medications, you owe it to yourself to take advantage of our COMPLIMENTARY Part D plan review. We offer an unbiased comparison of Part D plans in your area and can help you navigate through the Part D trickery! Call us today for your FREE comparison! 352-575-2342