If you think you’ve reached the coverage gap and you don’t get a discount when you pay for your brand-name prescription, review your next “Explanation of Benefits” (EOB). If the discount doesn’t appear on the EOB, contact your drug plan to make sure that your prescription records are correct and up-to-date. Get your plan’s contact information from a Personalized Search (under General Search), or search by plan name. If your drug plan doesn’t agree that you’re owed a discount, you can file an appeal.
Understanding the Medicare Part D Donut Hole
Once you and your Part D drug plan have spent $2,840 for covered drugs, you will be in the donut hole. Previously, you had to pay the full cost of your prescription drugs while in the donut hole. However, in 2011, you get a 50% discount on covered brand-name prescription medications. The donut hole continues until your total out-of-pocket cost reaches $4,550. This annual out-of-pocket spending amount includes your yearly deductible, copayment, and coinsurance amounts.
Medicare Part D coverage gap
The Medicare Part D coverage gap (informally known as the Medicare donut hole) is a period of consumer payment for prescription medication costs which lies between the initial coverage limit and the catastrophic-coverage threshold, when the consumer is a member of a Medicare Part D prescription-drug program administered by the United States federal government. The gap is reached after shared insurer payment – consumer payment for all covered prescription drugs reaches a government-set amount, and is left only after the consumer has paid full, unshared costs of an additional amount for the same prescriptions. Upon entering the gap, the prescription payments to date are re-set to $0 and continue until the maximum amount of the gap is reached: copayments made by the consumer up to the point of entering the gap are specifically not counted toward payment of the costs accruing while in the gap.
Donut Hole, Medicare Prescription Drug
Most plans with Medicare prescription drug coverage (Part D) have a coverage gap (called a “donut hole”). This means that after you and your drug plan have spent a certain amount of money for covered drugs, you have to pay all costs out-of-pocket for your prescriptions up to a yearly limit. Once you have spent up to the yearly limit, your coverage gap ends and your drug plan helps pay for covered drugs again.
Medicare Part D Coverage Gap
Coverage gap, also known as the “donut hole”: While in the coverage gap, you’ll pay 45% of the plan’s cost for brand-name drugs and 58% of the plan’s cost for generic drugs in 2016. You’re out of the coverage gap once your yearly out-of-pocket drug costs reach $4,850 in 2016. Once you have spent this amount, you’ve entered the catastrophic coverage phase. The costs paid by you or someone on your behalf (such as a spouse or loved one) for Part D drugs on your plan’s formulary will count toward your out-of-pocket costs. Additionally, manufacturer discounts for brand-name drugs count towards reaching the spending limit that begins catastrophic coverage. If your plan requires you to get your drugs from a participating pharmacy, make sure you do so, or else the costs may not apply. Keep in mind that costs that are paid for you by other insurance you may have, such as prescription drug coverage through an employer, won’t count towards your out-of-pocket spending.
How does this Donut Hole really work?
I use medications not covered by my Medicare Part D plan or sometimes I buy my medications from outside of the country (for instance, in Canada or Mexico). Are these prescription drug expenses included in the $3310 or any other Part D calculation? No. Any medications not included on your Medicare Part D plan’s formulary or drug list (also known as: out of formulary drugs) or drugs that you purchased outside of the United States fall outside of your Medicare Part D coverage and are not included in the $3310 or any other Part D calculation. If you use a medication that is not included on your formulary, you can ask your Medicare Part D plan for a formulary exception or coverage determination, whereby your non-formulary drug would be included on your own personal formulary. If your Medicare Part D plan denies your request for a coverage determination, you can appeal the denial – several times. Be sure to ask your Medicare Part D plan for details on the formulary exception and appeals process.
Closing the Medicare Part D Donut Hole
The Affordable Care Act (ACA) includes important improvements to Medicare prescription drug coverage (Part D) such as reducing expenses for seniors in the donut hole now and eliminating the gap altogether by 2020. Seniors receive additional savings each year on their prescription drugs until the donut hole is closed. The ACA also provides additional assistance for low-income beneficiaries. Since passage of the ACA in 2010, more than 7.9 million people with Medicare have saved over $9.9 billion on prescription drugs.