Are You in the Medicare Part D Donut Hole?

Man reviews label of prescription bottle

Many people think of the delicious treat when they hear “Donut Hole” and not the terrifying gap in prescription drug coverage that all Medicare prescription drug plans are required to include. Keep reading to find out if you’re in the gap and what the gap even means.

What is the Medicare Part D Donut Hole?

The Donut Hole is one of four stages that can happen through the year as a member of a part D prescription drug plan. We’ll get into the four stages soon, but the one that holds you responsible for your prescriptions at a higher price is the Donut Hole. If you enter the Donut Hole, you may have to pay a higher price for your medications until the next January 1st, or until your out-of-pocket costs qualify you for another stage of coverage.

Part D four coverage stages:

To determine how your prescription drug costs are covered, there are four coverage stages. This process resets on January 1st each year. 

1. Deductible Stage

Not all plans include a drug deductible. The prescription drug deductible is the amount you pay for drugs before your plan begins to pay its share. If your plan does not include a drug deductible, you would begin in the Initial Coverage Stage.

2. Initial Coverage Stage

This is the stage in which most members of a Part D prescription drug plan will start. This stage ends when the total cost of your drugs reaches $4,130. The total cost is your copay plus the amount your plan pays for your drug. Once you reach the $4,130 amount, you enter the Coverage Gap Stage (the Donut Hole).

3. Coverage Gap Stage (Donut Hole)

In the Donut Hole, you are responsible for 25% of the cost of generic and brand name Part D medications. Your plan and the manufacturer pay the remaining 75% of the cost for brand-name Part D medications. For generic Part D medications, Medicare will cover 75% of the cost.

You will remain in the Donut Hole until your out-of-pocket costs reach the maximum of $6,550. The entire cost of the Part D brand-name drug minus the 5% your plan covers will go towards your out-of-pocket maximum. Once you hit the out-of-pocket maximum, you will enter the Catastrophic Coverage Stage.  

Medicare Donut Hole Step-by-Step

What items can I count towards the Coverage Gap Stage?

  • Your yearly deductible, coinsurance, and copayments
  • Discount you get on brand-name drugs in the Donut Hole
  • What you pay in the Donut Hole

What items can I NOT count towards the Coverage Gap Stage?

  • Drug plan premium
  • Pharmacy dispensing fee
  • What you pay for drugs that are not covered

4. Catastrophic Coverage Stage

When you enter the Catastrophic Coverage Stage, you will pay the greater of: 5% of the total cost of the drug or $3.70 for generic drugs and $9.20 for brand-name drugs. You will remain in this stage until January 1st, when the Part D Prescription Drug Coverage Stages reset.

Getting close to the Donut Hole and need help?

Help is available if you are in the Donut Hole or are getting close to it. There are many resources available to individuals who reach, or at risk of reaching, the gap:

Prescription Advantage: An income-based assistance program for Massachusetts residents that may help you pay for your prescription drugs once you are in the Donut Hole. Your income level will determine the level of assistance you are granted. For more information, call 1-800-AGE-INFO (1-800-243-4636) TTY: 1-877-610-0241, press option 2, or visit www.mass.gov/prescription-drug-assistance.

Low Income Subsidy (LIS), or Extra Help: LIS is an income-based assistance program run by the Social Security Administration. If you qualify, you may receive help paying for your monthly premium and prescription drug copays. For more information, contact Medicare at 1-800-633-4227 (TTY: 1-877-486-2048), the Social Security Office at 1-800-772-1213 (TTY: 1-800-325-0778), or the Office of Medicaid Commonwealth of Massachusetts at 1-617-573-1770.

Pharmaceutical Company Prescription Assistance Programs: You may also qualify for help with the cost of certain medications through prescription assistance programs offered by the drug manufacturer. Every drug manufacturer has certain criteria that you must meet in order to qualify for help. If you need assistance, contact Customer Relations.

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