How does Part D Rx coverage work in the Coverage Gap – Donut Hole?
The Coverage gap or Donut Hole (see graphic) 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 *
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.
2020 Part D Rx Donut Hole – Cost Sharing
Click on link above or chart for a sharper clearer image
CMS has released the following 2021 parameters for the defined standard Medicare Part D prescription drug benefit:
Deductible: $445 (a $10 increase from 2020);
Initial coverage limit: $4,130 (a $110 increase from 2020);
Out-of-pocket threshold: $6,550 (a $200 increase from 2020);
Total covered Part D spending at the out-of-pocket expense threshold for beneficiaries who are not eligible for the coverage gap discount program: $9,313.75 (a $275 increase from 2020);
Estimated total covered Part D spending at the out-of-pocket expense threshold for beneficiaries who are eligible for the coverage gap discount program: $10,048.39 (a $329.01 increase from 2020); and
Minimum cost-sharing under the catastrophic coverage portion of the benefit: $3.70 for generic/preferred multi-source drugs (a $.10 increase from 2020), and $9.20 for all other drugs (a $.25 increase from 2020). Thompson-Reuters *
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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 *
Resources & Links
Be sure to follow the footnotes & brochures above
Your Guide to Rx Coverage Publication #11109 Page 15 Coverage Gap
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.
- More help – beyond LIS
- What if you have $$$ from Sale of Home and are buying a new home?
Email us if you have questions.