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Health Insurance, Medicare & Medicaid

What is the ‘Donut Hole’ Coverage Gap and How Can It Affect Me?

 

When you hear about a “donut hole,” you might think about those sweet round balls of doughy goodness you pick up at your local pastry shop. However, in terms of to Medicare, it means something very different. This donut hole refers to the potential gap in coverage that affects many people who are covered by Medicare Part D.

How Medicare Part D Works

Medicare is a federal health insurance program for those ages 65 and older and patients under 65 with certain disabilities. Medicare Part D covers outpatient prescription drugs, although there are some specific requirements before the plan starts paying. In order to receive reimbursement, you must pay the premiums each month, as well as the cost of your prescriptions, until you reach the $310 deductible.

Upon reaching the deductible, the plan will pay seventy-five percent of covered prescription drug costs, leaving you responsible for twenty-five percent. When the plan has paid its limit of $2,800, you will reach the donut hole gap in coverage.

Donut Hole Gap

Between the limit of $2,800 and the maximum out-of-pocket amount of $4,550 in a year, you are responsible for 100% of your prescription drug costs. When you reach the out-of-pocket limit, the plan will begin paying again, leaving you responsible for about five percent of the costs. The difference between the limits means you could end up shelling out several thousand dollars, which can cause significant financial strain.

Options for the Coverage Gap

You may qualify for the Medicare Extra Help program, which assists you in paying your premiums and reduces or eliminates the out-of-pocket cost for drugs. Some plans offer donut hole coverage, although these typically come with higher monthly premiums.

Before you choose your coverage, consider the prescriptions you take regularly and how much they cost. You can also head on over to SuperSeniorConnection.com to discuss options with others who are in similar situations and may have additional insight into coverage options for the donut hole gap.

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