What is the Medicare Donut Hole?

Some Medicare Part D plans (prescription drug coverage) might have a coverage gap. This coverage gap is often called the "Medicare Donut Hole." The donut hole occurs when you have spent a certain amount of money on prescription drugs. In 2016, for example, the coverage gap begins at $3,310. This mean, once you and your Medicare Part D plan have spent $3,310 on prescription drugs, you are in the donut hole.

If you're in the Medicare donut hole, you pay for your prescription drugs until you hit your plan's out-of-pocket limit. After you hit the out-of-pocket limit, you're no longer in the donut hole. At this point you are in "catastrophic coverage." While in catastrophic coverage you only pay a small copayment.

For a higher monthly premium, there are some Medicare Part D plans that can help cover part of the Medicare donut hole.

As part of the Affordable Care Act, the donut hole is being phased out and will be entirely eliminated by 2020.

Important Medicare Donut Hole Questions

Because the donut hole will exist for a few more years, there are some important questions to ask you insurance agent when purchasing a prescription drug plan:

1. What is my plan's out-of-pocket limit? Once you've hit that limit you're out of the donut hole.

2. Does my plan provide any coverage during the donut hole? Part D plans vary. Some offer coverage for generic prescription drugs during the donut hole, for example.

Our licensed agents are happy to help. Give us a call or request a free Medicare Part D quote.

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