This is also known as Medicare’s coverage gap and is the cost-sharing stage of a Medicare Part D
Prescription Drug Plan. The donut hole 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 donut hole. 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.