What is the Donut Hole?

medicare supplemental

Most Medicare drug plans have a coverage gap or “doughnut hole.” Once you have reached your plan’s limit for prescription drugs, your coverage stops. You are responsible for paying 100% of the drug costs, (including the costs of the deductible and coinsurance), up to the point you become eligible for Catastrophic Coverage. This gap in coverage is known as the Coverage Gap or Doughnut Hole. Plans may offer limited coverage during the coverage gap.

Medicare has worked to “close the doughnut hole” in the following ways:

Gives a $250 rebate to all Part D enrollees who enter the donut hole in 2010.

  • Provides a 50 percent discount on brand‐name drugs in the donut hole, beginning in 2011.
  • Phases in additional discounts for brand‐name and generic drugs to close the doughnut hole completely by 2020.

A typical Medicare beneficiary who hits the donut hole will save over $700 in 2011, and over $3,000 by 2020.

Each state offers at least one plan that provides some type of coverage during the coverage gap. However, plans with gap coverage may charge a higher monthly premium. Some plans may only offer generic drug coverage during the gap. You can use our free Plan Comparison Tool to see which plans might cover the prescription drugs you use.

Is there anything I can do to delay reaching the coverage gap?

There are a number of things you can do to help reduce your drug costs, they include:

  • Switching to lower cost drugs. Talk to your doctor about using generic and/or over-the-counter (OTC) drugs. Many work as well as the higher cost prescriptions. It can help you save hundreds of dollars a year and can be just enough to keep you out of the coverage gap.
  • Take advantage of mail-order programs through your Part D plan. They can save you on medication used long-term (90 days or longer).
  • Always use your Medicare drug plan card. When you use your drug plan card, you get discounted rates on the drugs you buy and any money spent on drugs is automatically counted toward your deductible.

Look for programs that offer assistance. Programs, such as 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 are available at www.benefitscheckup.org.

The Benefit Link Inc | Medicare Supplemental Plans 866-630-0626 ext 108