What is the Medicare Part D Coverage Gap?Posted by Medicare Made Clear
The Medicare Part D coverage gap, or “doughnut hole,” is a point in your prescription drug coverage where you begin to pay most of your health plan’s price for the drugs you take. That cost can vary from plan to plan, because each insurance company negotiates its own prices with pharmacies and drug companies.
The coverage gap begins after you and your health plan have paid a total of $2,840 for your prescription medications in a single year. You pay your share of this amount through copays and coinsurance, which are calculated by your plan based on its negotiated prices and on guidelines set by Medicare. If your plan charges a deductible, then that amount is included in your share of the cost as well.
Prior to 2011, Medicare beneficiaries paid 100% of the cost of their drugs during the coverage gap.
In 2011, you will pay 93% of your plan’s negotiated price for generic drugs and about 50% of the price for brand-name drugs during the coverage gap, regardless of the plan. Your percentage share of your plan’s negotiated price for drugs will continue to decrease each year until 2020 when the coverage gap is closed as part of health care reform
Once you have paid a total of $4,550 out-of-pocket in a single year, your coverage gap ends and you enter the “catastrophic coverage” phase of your prescription drug coverage. For the rest of that year, you will pay only a small copay for your prescription medications.
The cycle of cost-sharing to coverage gap to catastrophic coverage starts over with each plan year. Whether you have a standalone Medicare Part D plan or you have a Medicare Advantage plan with built-in drug coverage, it’s important to review your medication needs and the cost-sharing terms of your health plan each year to ensure that you are getting a good value.
For more information about Medicare prescription drug coverage, you can download our informative Medicare Made Clear Show Me Guide.
Visit MedicareMadeClear.com to learn more about Medicare and how it works. Or call us at 1-877-619-5582, TTY 711, 8 a.m. – 8 p.m. local time, 7 days a week.
The family of UnitedHealthcare® Medicare Solutions plans are insured or covered by an affiliate of UnitedHealthcare, a Medicare Advantage organization with a Medicare contract and Medicare-approved Part D Sponsor.
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