The information on this website may assist you in making personal decisions about insurance, but it is not intended to provide advice regarding the purchase or use of any insurance or insurance products. The changes that Medicare are making aim to reduce the costs that people incur while they are in the donut hole. For both generic and brand-name drugs, only a certain amount of the cost counts towards your OOP threshold. After Part D began, about 60 to 70 percent of eligible people without prescription drug coverage enrolled. Both brand-name and generic drugs are covered in Medicare Part D plans. The Medicare Part D coverage gap for prescription drugs, commonly referred to as the “Medicare donut hole,” has been gradually closing since the Affordable Care Act went into effect in 2010. At this point, insurance coverage will kick back in to cover drug costs. Medicare has a helpful search tool to find programs in your state. The term donut hole is a synonym for the coverage gap some people experience with Medicare Part D prescription insurance. Members are in the donut hole. Only this $10 will count toward your OOP costs for exiting the donut hole. While in the donut hole in 2017, members will pay 40% of the price of a brand-name drug. This totals to $38. The donut hole is a temporary limit on what Part D will pay for medicines. When this occurs, they are out of the donut hole. This means that you’ll have to pay whatever is greater for the rest of the year: 5 percent of a drug’s cost or a small copay. Below, we’ll explain the stages of the donut hole and how to prepare for it. Well you are in the right place! Legislative changes have gradually closed the doughnut hole so that, this year, beneficiaries no longer face a coverage gap. According to the most recent statistics from the Kaiser Family Foundation, an estimated 4.9 million Medicare Part D enrollees reached the catastrophic coverage portion of Medicare Part D in 2017. This Medicare Part D donut hole explained infographic can be saved and printed. Zip Code. So, let’s talk about the basics of Medicare. Many states offer programs that can help with the cost of your prescriptions. This means that after spending a specific amount on a drug plan, you’re responsible for copayments for prescriptions. However, people still experience changes in their coverage as they spend on their prescription drugs. In the donut hole, a person pays for 25% of their medication costs out-of-pocket and receives discounts from drug manufacturers to cover the remaining costs. Quick Answer: The Donut Hole refers to a gap in prescription drug coverage under Medicare Part D. Starting on January 1, 2020, the Donut Hole will be closed completely. For example: For brand-name drugs, 95 percent of the total medication price will count towards reaching the OOP threshold. All rights reserved. We will update it regularly as the pandemic continues. You enter the donut hole once Medicare has paid a certain amount toward your prescription drugs in one coverage year. After surpassing this limit, you’ll need to pay a certain percentage yourself until you’ve reached what’s called the OOP threshold. They often have to pay thousands of dollars for prescription drugs until they cross this coverage gap. Thanks to the Affordable Care Act (more commonly known as Obamacare), Medicare enrollees will see the end of the dreaded donut hole in a few years. The Medicare Part D donut hole is a coverage gap where you're responsible to pay 25% of your drug costs for generic and brand medications. 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