Medicare Part D Coverage Gap (Donut Hole)This term refers to the gap in coverage by prescription drug plans that occurs when the member and the plan have each contributed a set amount outlined in the plan for the medications that it covers. Some people will not experience the gap because the costs of their medications will not reach that level.

According to the Medicare & You 2018 guidebook, people who enter the donut hole this year pay 35% of the covered brand-name drug costs outlined in the plan; and 44% of the plan cost for generic drugs. This continues until the person reaches the end of the gap.

Your annual deductibles, coinsurance, and copayments all contribute toward removing the coverage gap. So do discounts you receive on covered brand-name drugs in the gap and what you pay in the gap. However, the plan premium does NOT count toward getting you out of the gap, nor does what you pay for drugs not covered under your plan.

Catastrophic coverage – Part D plan members automatically receive this once they are out of the donut hole. Their coinsurance and copayments are reduced for covered drugs during the remaining plan year.

People who qualify for Extra Help (or the Low-Income Subsidy) will avoid the coverage gap or donut hole. Extra Help is a federal program helping eligible individuals with limited income pay for Medicare Part D costs such as premiums, deductibles, and copayments/coinsurance.

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Return to: Medicare Part D takes pride in providing you as much information as possible concerning your Medicare options, but only a health insurance broker licensed to sell Medicare can help you compare your plan options from various insurance companies. When you’re ready, we recommend you discuss your needs with a Licensed Sales Agent.

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