About the Medicare Part D Prescription Drug Coverage Gap (“Donut Hole”)
The Medicare coverage gap is the phase of your Medicare Part D benefit when there is a gap in prescription drug coverage. During this phase, you will have to pay more for your drugs, until you reach the catastrophic coverage phase. 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. You then pay for your prescriptions 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 $4700 in 2015.
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 should only consider one of these plans if you have high drug costs and know you will 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 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.
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 coverage 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 three months or more) from your prescription drug plan’s mail-order pharmacy. Mail-order pharmacies typically provide a three-month supply of drugs for about the same copayment amount as a two-month supply at retail pharmacies.
- Always use a preferred pharmacy if your Medicare prescription drug plan or Medicare Advantage Prescription Drug 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 the member card for your Medicare Advantage Prescription Drug plan or Medicare prescription drug plan. When you use your prescription 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. There may also be State Pharmaceutical Assistance Programs available in your state, which also assist with Medicare Part D costs.
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 Advantage Prescription Drug plan or Medicare prescription drug plan? I would be more than happy to help you find prescription drug coverage that may work for you.
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