What is the Donut Hole?The Donut Hole is a term used to describe the gap in the Medicare Part D plan coverage where the Medicare Part D plan participant (i.e. you) must pay 100% of the cost for your prescription drugs. This is also sometimes referred to as the coverage gap or the second deductible. The Donut Hole is the portion of your prescription drug costs from $2,250 to $5,100 as illustrated by our online out of pocket cost calculator:
Some people have considered the Donut Hole as a second deductible before the plan's catastrophic coverage begins. In other words, the CMS model Medicare Part D plan has a $250 deductible (100% paid by the individual) and then 75% coverage from $251 until $2,250 (25% paid by the individual). Then, as noted, after $2,250, the individual pays again 100% up to $5,100. After $5,100 the individual pays only 5%.
Certainly, not every plan follows the CMS model and provides additional coverage to close up the Donut Hole so that the individual would not face the second 100% out of pocket expenses.
For example, some plans will address the donut hole by using Generic Drugs with a copayment or alternatively, by using coverage of both Generic and Brand Drugs with a different copayment for each. These types of plans will usually be available for a higher monthly premium and may not be available in all regions. | |
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