About the Medicare Part D Prescription Drug Coverage Gap (“Donut Hole”)
Last Updated : 11/06/20194 min read
Summary: The Medicare coverage gap is the phase of your Medicare Part D benefit after you and your plan spend a certain amount within a year. The gap officially closes in 2020, but you could still spend more than the initial coverage limit and then pay a different amount for your medications.
You might not reach this stage at all.
After you exceed the initial coverage limit, you may have to pay more for your prescription drugs, until you reach the catastrophic coverage phase. Note that some plans don’t require you to pay higher costs in 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) exceed the initial coverage limit ($4,020 in 2020). 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 $6,350 in 2020. If you reach the catastrophic phase, you’ll pay a small amount for each covered medication for the rest of the year.
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 might 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?
The Affordable Care Act gradually reduced the amount of money you may have to pay for covered prescriptions. As of 2020, the coverage gap is considered closed. However, if you and your plan spend past the initial coverage limit, you’ll still enter this coverage phase.
- In 2020, you’ll pay up to 25% for generic prescription drugs and covered brand-name drugs.
How can I delay or avoid reaching the coverage gap?
There are a number of things you can do to help lower your prescription drug costs all year long and delay or avoid 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 prescription drugs at a reduced cost.
- If there are any prescription medications you take on an ongoing basis, consider using your Medicare Prescription Drug Plan’s mail-order pharmacy if available. This might save you money with many plans.
- Use a “preferred” pharmacy if your plan has both preferred and non-preferred pharmacies in its network. Your copayments may be lower if you fill your covered prescriptions at a preferred pharmacy.
- Use your plan’s member card when purchasing your prescriptions. When you use your prescription drug plan card, you might get discounted rates on the prescription drugs you buy, and your costs apply toward your deductible.
- Look for programs that offer assistance. There may be State Pharmaceutical Assistance Programs available in your state, which might assist with Medicare Part D costs. Visit Medicare.gov to find out if there’s a Pharmaceutical Assistance Program for the medications you take.
If you do reach the coverage gap, you may be able to keep your drug costs down by using lower-cost generic prescription drugs whenever possible (if your prescribing doctor agrees) or using your plan’s mail-order pharmacy.
You can start comparing Medicare Advantage Prescription Drug plans and Medicare Prescription Drug Plans we offer by clicking the Compare Plans buttons on this page.