What is the “donut hole?
Medicare Part D has different benefit levels based on your income and the money you have in the bank. According to the 2008 Federal Poverty Level (FPL), people in the highest income group or “standard” benefit category will pay a $295 deductible plus 25% of the first $2,700 in drug expenses. Once total drug expenses reach $2,700, the $295 deductible plus $2,405 for drug expenses, Medicare does not cover the next $3,453.75 in medication expenses. The non-coverage period has been called the “donut hole”. Once the individual and Medicare spend $6,153.75 in drug expenses, the “catastrophic level” is reached. From this point to the end of the year, Medicare pays 95% of the individual’s drug costs.
Medicare Part D has different benefit levels based on your income and the money you have in the bank. According to the 2011 Federal Poverty Level (FPL), people in the highest income group or “standard” benefit category will pay a $310 deductible plus 25% of the first $2,530 in drug expenses. Once total drug expenses reach $2,840, the $310 deductible plus $2,530 for drug expenses, Medicare does not cover the next $3,607.50 in medication expenses. The non-coverage period has been called the “donut hole”. Once the individual and Medicare spend $6,447.50 in drug expenses, the “catastrophic level” is reached. From this point to the end of the year, Medicare pays 95% of the individual’s drug costs. Drug costs, deductibles and/or co-payments paide by ADAP will count toward the $6,447.50 in the total expenditures needed to get through the “donut hole” and reach the catastrophic coverage level.
