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About the Medicare Part D (Prescription Drug) Donut Hole, or Coverage Gap

The Medicare Coverage Gap is the stage of your Part D benefit when there is a gap in prescription drug coverage. During this stage you will have to pay the full amount of your drug costs, until reaching the Catastrophic Stage. Most Medicare 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. You then pay for your prescriptions out-of-pocket  until entering the plan’s Catastrophic Stage. This is when your total out-of-pocket costs, including the annual deductible and copayments/coinsurance, reach their limit.

Each state offers at least one plan that provides 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 should only consider one of these plans if you have high drug costs and know you will reach the coverage gap.

Beneficiaries with the following conditions or drug classes most frequently reach the coverage gap:

  • Alzheimer’s
  • Oral Anti-Diabetics
  • Proton Pump Inhibitors
  • Anti-depressants
  • Angiotensin Receptor Blockers
  • Statins
  • Osteoporosis
  • ACE Inhibitors

How does the Affordable Care Act affect the coverage gap?

Until 2020, when the Coverage Gap is closed, you’ll pay gradually less for both generic and brand-name medications.

  • In 2015, you’ll pay 45% for brand-name drugs and 65% for generic drugs.
  • In 2016, you’ll pay 45% for brand-name drugs and 58% for generic drugs.
  • 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.

 

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How can I delay reaching the coverage gap?

There are a number of things you can do to lower your drug costs all year long and delay reaching the gap:

  • Talk to your doctor about using lower-cost generics that are right for you.
  • Find out if any of your local pharmacies offer your drugs at a reduced cost.
  • Buy your long-term medications (medications that you take for 3 months or more) from your plan’s mail-order pharmacy. Mail-order pharmacies typically provide a 3-month supply of drugs for about the same copay amount as a two-month supply at retail pharmacies.
  • Always use a preferred pharmacy if your plan has both preferred and non-preferred pharmacies in its network. Your copayments will be lower if you fill your covered prescriptions at a preferred pharmacy.
  • Always use your Medicare drug plan card. When you use your drug plan card, you get discounted rates on the drugs you buy, and your costs apply toward your deductible.
  • Look for programs that offer assistance. For example, the National Patient Advocate Foundation or the National Organization for Rare Disorders may have programs that can help with your drug costs. Comprehensive information on federal, state, and private assistance programs in your area is available at www.benefitscheckup.org.

If you do reach the Coverage Gap, you can keep your drug costs down by using lower-cost generic drugs whenever possible or using your plan’s mail-order pharmacy for long-term medications. If you reach the Coverage Gap at the end of the year, and know that you will not have enough drug costs to qualify for catastrophic coverage, you may also want to consider using a discount drug card.

Do you have questions about the Medicare Coverage Gap? Would you like some help choosing a Medicare drug plan? I would be more than happy to help you find prescription drug coverage that works best for you.

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