Today, we are hoping to provide answers to some of your questions about the Donut Hole! Tell us about your experiences. We would love to hear from you.
1. What is the donut hole? To answer that question, we first need to understand Medicare and Part D.
According to Jonathan Blum, Deputy Administrator and Director for the Center of Medicare at the Centers for Medicare and Medicaid Services, Medicare is the federal health insurance program for people 65 or older, people under 65 with certain disabilities, and people with End-Stage Renal Disease (permanent kidney failure). People with Medicare have the option of paying a monthly premium for outpatient prescription drug coverage. This prescription drug coverage is called Medicare Part D.
Basic Medicare Part D coverage works like this:
- You pay out-of-pocket for monthly Part D premiums all year.
- You pay 100% of your drug costs until you reach the $310.00 deductible amount.
- After reaching the deductible, you pay 25% of the cost of your drugs, while the Part D plan pays the rest, until the total you and your plan spend on your drugs reaches $2970.00.
- Once you reach this limit, you have hit the coverage gap referred to as the “donut hole,” and you are now responsible for the full cost of your drugs until the total you have spent for your drugs reaches the yearly out-of-pocket spending limit of $4,550.
- After this yearly spending limit, you are only responsible for a small amount of the cost, usually 5% of the cost of your drugs.
2. What is the structure, e.g., cut-offs, coverage amounts and patient payment percentages?
The “donut hole” refers to a gap in prescription drug coverage under Medicare Part D. In, 2013, once you reach $2,970 in prescription drug costs (which include both your share of covered drugs and the amount paid by your insurance), you will be in the