What is the Medicare Donut Hole?
Persons enrolled in a Medicare Part D Prescription Drug Plan reach the coverage gap or donut hole after their plan has paid $2,830 of their medication costs. Medicare enrollees in the donut hole currently pay 100% of their medication costs during this period until their total out-of-pocket expenses for drugs on the plan’s formulary reach $4,550. At this point when the $4,550 is reached, what is known as catastrophic coverage kicks in and enrollees only pay 5% of drug costs for the rest of the year. At the beginning of each year, Medicare Part D coverage resets, and enrollees return to the plan’s initial coverage.
Persons enrolled in a Medicare Part D Prescription Drug Plan reach the coverage gap or “donut hole” after their plan has paid $2,830 of their medication costs. Medicare enrollees in the “donut hole” currently pay 100% of their medication costs during this period until their total out-of-pocket expenses for drugs on the plan’s formulary reach $4,550. At this point when the $4,550 is reached, what is known as “catastrophic coverage” kicks in and enrollees only pay 5% of drug costs for the rest of the year. At the beginning of each year, Medicare Part D coverage resets, and enrollees return to the plan’s initial coverage.
