Medicare Coverage Gap

Coverage Gap to illustrate supplemental protection needed for your insurance policy

This is also known as the donut hole‚ and is the cost-sharing stage of a Medicare Part D Prescription Drug Plan. The coverage gap is entered once you and your health plan have reached a pre-set payment total for your drugs. While each plan is responsible for setting this amount, Medicare does have a maximum limit that cannot be exceeded. In 2015, you can spend a maximum of $2,960 on prescription drugs before entering the coverage gap. Then you pay 45% of the cost of brand name drugs and 65% of the cost of generic drugs until you spend $4,700; at this point, you reach the catastrophic coverage stage.

Darren spent some time in the coverage gap because his annual prescription drug costs were $3,500..