The majority of Medicare prescription drug plans (PDP) will reach a coverage gap, known as the donut-hole, which limits what the insurer will cover for your drugs. Let us explain your 2015 drug costs are during the donut hole.

Donut-Hole 2015

In 2015, if your Medicare Part D drug plan has a coverage gap once you and your insurance provider have paid $2,960 toward your covered drugs and you exit it at $4,700. Here is what you’ll owe for generics and your plan’s covered brand name drugs during the donut-hole:

  • Generic costs: 65%
  • Brand name costs: 45%

Brand Name Rx During Donut-Hole

Even though you only pay 45% of the cost of your insurance provider’s approved brand name drugs during the donut-hole, both what you pay AND what the 50% manufacture’s discount helps to get you out of the donut-hole (minus dispensing costs and drug costs). Here are the three steps to figure out what your total out of pocket spending equals:

  1. If you are prescribed a drug that costs $100 and a $5 dispensing fee, you would pay (100 x .45) $45 for the drug and (5 x .45) $2.25 for the dispensing fee for a total of $47.25, THEN
  2. The manufacture’s discount would total (100 x .5) $50, SO
  3. Your total counted toward out of pocket spending would be $97.25

Generics During Donut-Hole

Generic drugs total out of pocket spending is broken down differently from brand-name drugs. It is ONLY the amount you pay toward your generic drugs that helps you out of the donut hole; a manufacturer’s discount doesn’t apply.

Not All Plans Enter Donut-Hole

While most plans will enter the PDP donut-hole, there are some plans that do not. These plans are called enhanced. While an enhanced plan can offer coverage gap coverage, just by purchasing an enhanced plan does not guarantee it will cover you during the gap, and if it does it does not mean that it will cover all of your drugs. Make sure to do your research. Click here to see the difference between basic and enhanced drug plans.

Next Steps
During Medicare’s open enrollment (Oct 15 -Dec 7) you can switch or enroll, BUT you may still be able to change your current plan outside of open enrollment if you switch to a 5-star rated prescription drug plan. For further questions about drug plan coverage gaps call the number above or contact Senior65.