Medicare Donut Hole
‘Medicare Donut Hole’ is another term used to identify the coverage gap in prescription drug coverage. Most Medicare Prescription (Part D) plans have a donut hole. This means that after you and your Medicare drug plan have contributed a specific amount of money for your covered prescription drugs, you will have to pay 100% of the cost of your prescriptions up to a given limit. The limit amount will change each year.
In 2016, once you and your plan have spent $3,310 on covered medications, you will be considered to be ‘in the Medicare donut hole’. Not every Medicare participant will enter the donut hole. If the total spent on prescription medications is less than $3,310, there will be no coverage gap.
Once the you have reached the donut hole, Medicare will pay 42% of the price for generic drugs during the coverage gap. You will be responsible for paying the remaining 58% of the price. For covered name brand RX drugs, you will pay 45% of your Part D plan’s contracted cost. Visit the Medicare.gov site for coverage examples.
Medicare recipients meeting certain income and resource limitations may qualify for extra help. There is no applicable coverage gap or ‘Medicare donut hole’ for those recipients. Again, visit the Medicare.gov to learn more about extra help.
Also, people with Medicare who get Extra Help paying Part D costs won’t enter the coverage gap.
In 2016, you may qualify if you have up to $17,820 in yearly income ($24,030 for a married couple) and up to $13,640 in resources ($27,250 for a married couple).
If you don’t qualify for Extra Help, your state may have programs that can help pay your prescription drug costs. Contact your Medicaid office or your State Health Insurance Assistance Program (SHIP) for more information. Remember, you can reapply for Extra Help at any time if your income and resources change.