How does Part D Rx coverage work in the Coverage Gap – Donut Hole?

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Donut Hole - Coverage Gap
View Medicare Publication on closing the donut hole 11493it will close sooner  

Resources & Links

Prescription Drug Plans – Part D Rx  (credible coverage), 

Your Guide to Rx Coverage Publication #11109  Page 15 Coverage Gap

Kaiser Family Foundation Overview  

Donut Hole Discounts  CA Healthline 2014

CA Health Advocates RX Medicare Drug Overview

Wikipedia on Part D  

How to get a formulary exception – if your Rx isn’t on the list

Check your actual policy – Evidence of Coverage for details.

If you are getting Extra Help paying Part D costs – with the LIS – Low Income Subsidy you won’t enter the coverage gap.

Email us if you have questions.

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Under 65 ACA preventative care

Coverage gap (Medicare prescription drug coverage)—A period of time in which you pay higher cost sharing for prescription drugs until you spend enough to qualify for catastrophic coverage. The coverage gap (also called the “donut hole”) starts when you and your plan have paid a set dollar amount for prescription drugs during that year.  Your Guide to Rx Coverage #11109.

The “standard” Part D Rx coverage is spelled out below and shown in the    Graphic, it’s also explained in Your Guide to Rx Coverage #11109.

We can help you shop and see what Part D Rx  PDP or MAPD Medicare Advantage Plans that include Part D Rx, might work best for you.  See our instruction page for searching Part D plans.

  • Part D plans must cover at least the Part D standard benefit or its actuarial equivalent.
  • For 2019, the standard benefit requires the beneficiary to pay:
    • $415 deductible
    • 25% of prescription drug costs between $415 and $3,820 
    • Part of the costs in the “Coverage Gap” (Scroll down to see a graphic)
      • After total spending on drugs by the beneficiary, by certain subsidy programs and by the plan reaches $3,820 the beneficiary pays for 37% of generic drug costs and 25% of brand name drug undiscounted costs (drug manufacturers provide a 50% discount on brand name drugs).
        • The amount beneficiaries pay while in the coverage gap decreases by a small percentage each year until 2019 when they will be responsible for only 25% of brand and generic drug costs.
        • Nominal costs under catastrophic coverage:
          • Once beneficiary expenditures (including drug manufacturer discounts) reach a total of $5,100, the beneficiary is through the coverage gap and reaches catastrophic coverage. On any future prescriptions the beneficiary pays either a co-pay of $3.40 for generic drugs or $8.50 for brand name drugs or a co-insurance of 5%, whichever is greater. 
        • See graphs below for sources and a different way of looking at it.  The real issue is to look at the donut hole in YOUR coverage.  The standard benefit plan is a minimum.  Insurance Companies can offer more benefits, with lower co pays. 
        • See also our page on how to shop and compare.

Donut Hole Graphic
Click on image to enlarge

2020 Donut Hole Graphic

Learn More ⇒

Medicare.Gov on better benefits through 2020.  Trump budget changes brings this to 2019.

Yes, this gets confusing and changes every year.  Be sure to double check by clicking the charts and publications on the right and your Evidence of Coverage to verify the information on the plan you have.

Unfortunately, you are not allowed to buy extra coverage to cover the gap or donut hole. 

However, Insurance Companies do  offer better than the minimum standard, Part D plans, than what is shown above.

Medicare and You 2019 #10050
Everything you want to know 
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Prefer a printed version be mailed to you?

Medicare and You 2019 - Everything you want to know

Steve’s explanation of the donut hole

Technical Research Resources

Obama Care PP/ACA on HR 4872 Section 1101 closing the Donut Hole

The cost of the drug is the AWP (Average wholesale price). the actual drug manufacturer sets the price and when member is in donut hole they usually won’t pay full price, they pay the AWP.

Trying to get the lowest costs in and around the donut hole

We took Humira as an example and used Medicare.Gov (be careful and be sure to double check on the actual insurance company website – also, if you don’t get coverage from a company we represent – we will NOT be your agent and cannot contact the Insurance Company on your behalf!) 

Here’s a pdf of the example or click on thumbnail at left to see a screen shot.

2 comments on “Donut Hole – Coverage Gap

  1. Hi Steve,

    I’m new to Medicare and take several Rx for pain, asthma and a few other conditions. I heard that Part D makes one wait 6 months to a year to get coverage for the medications to cover a pre-existing condition. So, why should I bother getting coverage?

    ***Check our new page on Pre X and Prescriptions.

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