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

The Coverage gap or Donut Hole in Medicare prescription drug coverage  is when 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” – companies must meet this minimum, they can offer richer Part D Rx coverage is shown in the two Graphics below, it’s also explained in Your Guide to Rx Coverage #11109.

In 2020, you’ll pay no more than 25% for covered brand-name and generic drugs during the gap—the same percentage you pay from the time you meet the deductible (if your plan has one) until you reach the out-of-pocket spending limit Publication 11493 *   Thus, the donut hole is dead!  Forbes * Medicare.Gov *    

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

Scroll down for  instructions & Video on searching Part D plans on Medicare’s Website.   

See the links to Blue Cross and Blue Shield below and on the right.  Their shopping tools give more detail.  

 

Simple Explanation Donut Hole 2020

2020 Donut Hole Graphic

Steve's Video on Donut Hole circa 2014?

Prescription Drug Coverage Guide # 11109

Prescription Drug Coverage Guide # 11109

2020 Part D Rx Donut Hole – Cost Sharing
Click on link above or chart for a sharper clearer image

Part D Donut hole explained graph

Medicare Plan Finder for 2020
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If you want us to shop for you... Send [email protected]  a copy of your Medicare ID card.

Medicare Part D Shopping Video

Learn more on our webpage about the Shopping Tool along with Q & A or Ask your own question at the bottom of the Q & A section

BE CAREFUL OF THE SNAFU'S!!!

The “Total Yearly Cost of Care” does not provide personalized or transparent information. For example, when a consumer inputs or changes personal data, such as drug information, his or her total estimated costs do not change. This is not mathematically possible based on the plan benefits. Additionally, the tool does not share what is included in the total cost. As a result consumers will likely see the total cost and assume they are receiving a personalized and tailored estimate which may not be accurate.

The estimated total yearly cost of care is flawed. On a plan that has reduced benefits year over year, the expectation would be that the “estimated total yearly costs” would increase. However the tool is inaccurately estimating the consumer’s costs will decrease. It doesn’t make mathematical sense. For consumers on a fixed income and cost conscious, this could be detrimental to their situation.

Most supplemental benefits are not included in the total yearly cost of care. Over the past several years supplemental benefits have expanded and provided members with options that not only treat, but prevent illness and increase quality of life. We know the high value of benefits such as vision, dental and hearing to our consumers, and they are a key way we are partners in care with our members. Some of the benefits that are not included are:

Transportation lists copay but not number of rides.

Eyeglasses list copay but does not share if benefit covers frames, lenses or contacts.

Wellness Programs include a long list of possible items including fitness, nurse hotline, Personal Emergency Response and telehealth, that can’t be lumped into a single “covered” or “not covered” benefit.  Excerpt from UHC Agent Memo  * Forbes GAO 7.2019 Report

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.

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16 comments on “Donut Hole – Coverage Gap

    • Specialty tier drugs—defined by Medicare as drugs that cost more than $670 per month in 2019—are a particular concern for Part D enrollees in this context. Part D plans are allowed to charge between 25 percent and 33 percent coinsurance for specialty tier drugs before enrollees reach the coverage gap, where they pay 25 percent for all brands, followed by 5 percent coinsurance when total out-of-pocket spending exceeds an annual threshold ($5,100 in 2019). While specialty tier drugs are taken by a relatively small share of enrollees, spending on these drugs has increased over time and now accounts for over 20 percent of total Part D spending, up from about 6 to 7 percent before 2010.

      Medicare Part D enrollees not receiving low-income subsidies can expect to pay thousands of dollars out of pocket for a single specialty tier drug in 2019 (Figure 1). Median annual out-of-pocket costs in 2019 for 28 of the 30 studied specialty tier drugs range from $2,622 for Zepatier (for hepatitis C) to $16,551 for Idhifa (for leukemia), based on a full year of use; two of the 30 drugs are not covered by any plan in our analysis in 2019.

      With the now-complete closure of the Part D coverage gap for brand-name drugs, enrollees can expect to face lower annual out-of-pocket costs for selected specialty tier drugs below the catastrophic threshold in 2019 compared to 2016, but higher costs above—driven by an increase in underlying total costs between 2016 and 2019. For example, for Humira, for rheumatoid arthritis, median out-of-pocket costs below the catastrophic threshold decreased by $99 between 2016 and 2019 (from $3,155 to $3,057), while costs above the catastrophic threshold increased by $705 over these years (from $1,709 to $2,414)—and in total, expected annual out-of-pocket costs for Humira are $606 (12%) higher in 2019 than in 2016. Kff.org high drug cost chart

        • Part B covers certain drugs, like injections you get in a doctor’s office, certain oral cancer drugs, and drugs used with some types of durable medical equipment—like a nebulizer or external infusion pump.

          Under very limited circumstances, Part B covers certain drugs you get in a hospital outpatient setting. You pay 20% of the Medicare-approved amount for these covered drugs. Part B also covers the flu and pneumococcal shots. Generally, Medicare drug plans PDP cover other vaccines, like the shingles vaccine, needed to prevent illness.

          Note: Medicare Part A (Hospital Insurance) or Part B generally doesn’t cover self-administered drugs you get in an outpatient setting like in an emergency room, observation unit, surgery center, or pain clinic. Publication 11109 Page 12

          https://www.medicare.gov/coverage/prescription-drugs-outpatient

          • What about an infusion at my doctors office of remicade (Infliximab) for Crohn’s or IBS Irritable Bowel Syndrome?

            • Medicare covers most physician-administered drugs like REMICADE® under Medicare Part B. There are comprehensive published Part B coverage policies specific to REMICADE®. Copies of coverage policies (for example, local coverage determinations, or LCDs) are available on your regional Medicare Administrative Contractor’s, or MAC’s website.

              Medicare typically places few restrictions on REMICADE® coverage. However, some Medicare policies may limit coverage of REMICADE® to certain diagnoses, such as:

              Crohn’s disease
              Ulcerative colitis

              Rheumatoid arthritis
              Ankylosing spondylitis
              Psoriatic arthritis
              Plaque psoriasis
              You can check your regional MAC website for coverage policies for REMICADE® https://med.noridianmedicare.com/web/jea/topics/drugs-biologicals-injections or call Janssen CarePath at 877-CarePath (877-227-3728) for more assistance. https://www.janssencarepath.com/hcp/remicade/insurance-coverage/medicare

            • So Medicare Part B would have a $185 deductible, then Medicare pays 80%. Plan G would pay the other 20%.

              Use menu above to find Plan G Evidence of Coverage or Summary of Benefits

              Plan G

            • How is Part D coverage different from Part B coverage for certain drugs?

              It doesn’t cover most drugs you get at the pharmacy. You’ll need to join a prescription drug plan to get Medicare coverage for drugs for most chronic conditions, like high blood pressure.

              Part B covers certain drugs, like injections you get in a doctor’s office, certain oral cancer drugs, and drugs used with some types of durable medical equipment—like a nebulizer or external infusion pump. Under very limited circumstances, Part B covers certain drugs you get in a hospital outpatient setting. You pay 20% of the Medicare-approved amount for these covered drugs. Part B also covers the flu and pneumococcal shots. Generally, Medicare drug plans cover other vaccines, like the shingles vaccine, needed to prevent illness.

              Note:

              Medicare Part A (Hospital Insurance) or Part B generally doesn’t cover self-administered drugs you get in an outpatient setting like in an emergency room, observation unit, surgery center, or pain clinic. Your Medicare drug plan may cover these drugs under certain circumstances. You’ll likely need to pay out-of-pocket for the entire
              cost of these drugs and send in a claim to your drug plan for a refund of the portion not covered. Call your plan for more information. Also, visit Medicare.gov for more information on how Medicare covers self-administered drugs you get in a hospital outpatient setting. https://www.medicare.gov/Pubs/pdf/11109-Your-Guide-to-Medicare-Prescrip-Drug-Cov.pdf#page=12

              ■ Injectable and infused drugs: Medicare covers most injectable and infused drugs given by a licensed medical provider if the drug is considered reasonable and necessary for treatment and usually isn’t self-administered.

              CMS.gov # 11315

              I don’t see remicade or infliximab on https://www.medicare.gov/find-a-plan/questions/home.aspx

            • How Much Does Remicade Cost?

              A single dose of Remicade can cost from $1,300 to $2,500.

              The first step is determining insurance coverage for the infusion. Medicare does cover Remicade infusions. Most insurance companies require “pre-approval” for coverage. Therefore, the doctor’s office must explain to the insurance company what drug is being given, what other treatments have been tried, and why the new treatment is recommended (typically via a standard form). HMO coverage depends on the individual HMO and the particular agreement with the treating doctor. Any balance of the charges and/or co-pays should be understood prior to beginning treatment. https://www.emedicinehealth.com/remicade_for_rheumatoid_arthritis_treatment/article_em.htm

  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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