What is the coverage gap, and what do I pay?
The coverage gap (also called the donut hole) is the amount you must pay each year for your own prescription drugs, with some discounts. Once your total drug costs (what you and the plan pay for your prescriptions) reach a pre-set dollar amount for that year, you will reach the donut hole. Then you will pay all of your drug costs until your total out-of-pocket cost reaches another pre-set amount. Reaching this amount triggers what is called catastrophic coverage. After that, Medicare Part D will cover 95% of your drug costs and you will pay a set co-pay or 5% of the cost of the drug for the rest of that year. (Keep in mind that some cancer drugs cost a lot and 5% can be several hundred dollars a month.) A 2012 example: If your drug costs (what you and the plan pay for your prescriptions) add up to more than $2,930 in 2012, you will probably hit the coverage gap. At this point you will pay a percentage of your drug costs: • No more than 86% of the cost for generic drugs • 50% of the cos
