Medicare Donut Hole (Part D)
The Medicare Donut Hole is a prescription drugs coverage gap found under Part D. During this period; the beneficiary will have a temporary limit on their prescription drug coverage.
What this means is, after you have spent a particular amount of money on your Medicare drug plan for the covered prescription drugs, you’ll be responsible for all costs out-of-pocket for your drugs, up to a particular out-of-pocket limit.
Some of the things that count towards the out-of-pocket limit include co-payments, coinsurance, the yearly deductible, and what you pay during the coverage gap.
You can find changes to the donut hole for 2019 here.
Medicare Donut Hole Coverage Explanation
The best way to explain the Medicare Donut Hole is that once your total prescription drug costs, [your deductible, what your insurer has paid, and your co-pays] exceeds a particular amount, you’ll enter the donut hole gap.
During the gap period, you’re required to pay a certain percentage of the total cost of both brand-name and generic drugs.
Medicare Donut Hole coverage gets a certain percentage of the discounts offered on brand-name medicines paid for by the drug manufacturers, while the federal government pays the rest.
How Do I Get Out of the Medicare Donut Hole Gap
You’ll get out of the Medicare Donut Hole gap when your out-of-pocket payments during the beginning of the year [co-pays and deductibles] and anything you paid for medicines during the gap period reaches a certain amount.
Note that, the manufacturers’ contribution to the brand-name medicines also count towards your limit.
However, the amount contributed by the government does not make for the limit. Once you reach the limit, catastrophic drug coverage will kick in automatically, and your policy will settle 95 percent of the remaining costs until the year-end. This cycle is repeated every calendar year.
How Do I Get My Prescriptions During the Gap Period
You may continue to get your drugs through your plan, which will be at the price they have negotiated with the manufacturers. This is usually less compared to what you would pay retail.
Your insurer will track your costs so that they can be able to count toward your out-of-pocket limit. You can also get your drugs elsewhere which are less expensive than what your plan charges.
But, remember, under Medicare rules, only medicines bought at pharmacies within the network of your plan contribute to the Medicare Donut Hole limits that will help you get out of the gap.
What if I Cannot Afford the Cost of My Medication
Ask your doctor if any other medicine on your plan’s prescription would be as effective for your condition as the ones you’re currently using. Using lower-cost drugs, like generics or similar drugs but older brand-names will substantially lower your costs.
Medicare Donut Hole Prescription Assistance
It pays to have Medicare Donut Hole prescription assistance additional insurance like Extra Help or a state pharmacy assistance plan that can pay a portion or all your costs while in the gap. If you don’t have additional Medicare Donut Hole coverage help, you can consider non-insurance sources of help like:
- Lower-cost drugs from countries like Canada
- Free or low-cost medicines supplied by charities, patients’ organizations, or local medical clinics.
- Free or low-cost medicines from Medicare Donut Hole assistance programs, managed by pharmaceutical manufacturers
How Can I Avoid the Donut Hole
You can prevent the coverage gap if:
- The cost of your drugs for the year does not go beyond a certain amount.
- You qualify for the extra Medicare Donut Hole help, which is also known as the Low-income Subsidy. This is a federal program which helps qualified individuals with low-income, pay for the Medicare Part D costs like deductible, copayments/coinsurance, and premiums. You can apply for this program through the Medicaid department in your state or through the Social Security Administration. If you qualify for this Help, you won’t enter the “gap.”
- You have additional coverage from your employer or union benefits which will cover part or all of your gas costs.
- You have a Medicare drug plan which covers your medicine [usually generics only] while in the gap. This is usually for a higher premium. Costs for the additional coverage vary from plan to plan, so it pays to shop around.
Status of My Medicare Donut Hole Insurance Coverage Gap
The monthly statements you obtain from your plan provider should show you where you stand regarding your Medicare Donut Hole insurance coverage gap.
Whether you’re almost entering the gap or you’re already in it, knowing how much more you’re required to spend on your medicines before you qualify for the catastrophic coverage is a must.
My Part D plan offers additional gap coverage, will I receive a Medicare Donut Hole discount?
- If your plan has additional gap coverage, you’ll get a 50% discount from the drug manufacturer, but ONLY on brand name drugs. You’ll get credit towards the exit point of your Medicare Part D Donut Hole.
I have a new prescription that I don’t see on my Medicare Part D formulary and I’m currently in the Donut Hole, do I get a discount on my medication and will it count towards my Donut Hole exit?
- Only medications found on your plan formulary will be eligible for the 60% brand name drug discount and/or the 49% generic drug discount. All other medications are excluded from the Donut Hole discount.
So far, I’ve purchased around $3,500 worth of medications that will go toward my Donut Hole. Next month my brand name prescription purchase will bring me into my Donut Hole, but only a % of it will fall into the coverage gap. Will I get a discount on the full price or just the % that falls into the gap?
- The discount would only be applied towards the % that falls into the coverage gap. Let’s say your next brand name medication costs $300 that puts you in the Donut Hole. The 2019 Medicare Donut Hole coverage limit amount is $3,820, the discount would only apply to $100.
Does my Part D deductible count towards the coverage limit before reaching the Donut Hole?
- Yes, the total value of your purchased prescriptions is used to determine when you reach the initial coverage limit.
Is the Medicare Part D donut hole discount applied automatically?
- Yes, network pharmacies will apply the discount automatically when you buy medications that are included in the plan’s formulary.
Can I use a pharmacy drug discount program instead of my prescription plan?
- Yes, you can choose which coverage you prefer to go with.
Compare Medicare Part D Insurance Plans Online
To compare Medicare Part D insurance plans online today, you can use the Medicare Plan Tool Finder. Fill out the rating form on our site so that we can give you different rates as charged by various insurance providers.