Most plans with Medicare prescription drug coverage (Part D) have a coverage gap, which is sometimes referred to as the “donut hole”.  Once in the donut hole, there is a temporary limit on what the drug plan will cover for a member’s medication.

The donut hole begins after you and your drug plan have spent a certain amount for covered drugs.  In 2016, this amount is $3,310 – but this may change every year.  Once you reach the donut hole, you will pay 45% of the cost of brand name drugs and 58% of the cost of generic drugs (in 2016).

Mr. Smith has reached the donut hole in his Medicare drug plan.  He goes to his pharmacy to fill a prescription for a covered brand name drug.  The price for the drug is $50.  Mr. Smith will pay 45% of the plan’s cost for the drug ($50 x 45% = $22.50).

Keep in mind that not everyone will enter the donut hole.  If you’re not sure whether you’ve reached the donut hole, review your next Explanation of Benefits (EOB).  You can also contact your drug plan to make sure that your prescription records are correct and up-to-date.

For more information about Medicare, contact us at (941) 405 – 3900.   

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