Ever heard of the Coverage Gap with Part D? AKA… The Donut Hole?
It does exist and it IS something you need to know about. Especially if any of the following apply to you:
• you take more than 2 Brand Name Retail Medications that are NOT Generic
• You take any medication that does not yet have a Generic Equivalent
• You are diabetic and on insulin
• You have a lung disease that requires daily use of enhalers
If any of these apply to you, the chances of you falling into the Coverage Gap are high. If you are on Generic Medications and nothing else – Good news – You will never get close to the donut hole.
The Coverage Gap Explained
The Coverage Gap ( Donut Hole) is calculated using the FULL RETAIL COST OF YOUR MEDICATIONS. It is the Full Retail Cost of the medications that is counted. You NEVER pay the Full Retail Cost, but, that is what is used to keep track of your medications and the Donut Hole.
In 2018, starting on Jan 1, or when you first start your plan, once the full retail cost of your meds reaches $3,750, you fall into the Donut Hole. While in the donut hole, your responsibility for the cost of your meds increases. While there, you pay 44% of Generic Medications and 35% of Retail Brand Name drugs. You DO NOT pay the full retail price. BUT… It is still the Full Retail Cost that is calculated for the Coverage Gap. Once the Full Retail Cost reaches $5,000 you climb back out of the Donut Hole, and for the rest of the year your costs are minimal under what’s called Catastrophic Coverage. Then, the next year it starts all over again.
The Good News –
In 2010, Congress Passed a Bill that was then passed into law by President Obama that Gradually, over a 10 year period Eliminates the Coverage Gap for good.
Each year from 2010 to 2020, the percentages you pay while in the Coverage Gap DECREASE. AND… the number you have to hit to enter the Coverage Gap Increases. For Example:
In 2017, The percentages that you paid while you were in the Coverage Gap were 51% for Generic Medications and 40% for Retail Brand Name Medications. Also, the Magic number that entered you into the Donut Hole was $3,700. The $4,950 has not changed. So the length of time in the Coverage Gap is Shrinking and your costs while there are Decreasing until both are at “0”.