What is the Medicare Donut Hole?

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The Donut Hole

Most Medicare Prescription Drug Plans have a coverage gap, commonly referred to as the donut hole. You reach this point once you and your plan spend a certain amount, which changes every year. When that happens, your plan places a temporary limit on its prescription drug coverage.

Not everyone reaches the donut hole. It only happens if you and your plan spend a combined $4,020 on covered prescriptions (the limit in 2020). If you do reach that point, you will pay no more than 25 percent for covered brand-name and generic prescription drugs.

Your yearly deductible, co-insurance, co-payments, and what you pay while in the coverage gap all count toward your yearly out-of-pocket limit. It does not include your monthly premiums, dispensing fees charged by your pharmacy, or anything you pay for prescriptions that are not covered by your plan.

How Costly Can the Coverage Gap Be?

When you are in the donut hole, the coverage gap could amount to thousands of dollars. Once you reach the total out-of-pocket limit for the year – $6,350 in 2020 – you leave the donut hole and enter catastrophic coverage. For the rest of the year, you’ll pay only a small fee for co-insurance or co-payment on covered prescriptions.

HealthPlanOne is a licensed and certified representative of Medicare Advantage HMO, PPO and PPFS organizations and stand-alone prescription drug plans with a Medicare contract. Enrollment in any plan depends on contract renewal.

Medicare supplement insurance is available to those age 65 and older enrolled in Medicare Parts A and B and in some states to those under age 65 eligible for Medicare due to disability or End Stage Renal disease. Medicare supplement plans are not connected with or endorsed by the U.S. government or federal Medicare program.

For a complete list of available plans please contact 1-800-MEDICARE (TTY users should call 1-877-486-2048), 24 hours a day/7 days a week or consult www.medicare.gov.

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