The donut hole (coverage gap) is a term used to describe a limit in your Medicare Part D prescription coverage. An explanation is shown in the image below.
Here are a four commonly asked questions about the donut hole.
1. Will I enter the donut hole in 2021?
Not everyone will enter the coverage gap. Medicare drug plan coverage changes slightly year to year. The donut hole is the third stage of your Part D coverage. If you take medications with a total drug cost over $345 per month OR reach a total of $4,130, then you will enter the 2021 Donut Hole at some point during the year.
2. What happens if I enter the donut hole?
This means you have received medications with a total drug cost of $4,130 or more before the end of the year. There’s a limit on what your Medicare Part D plan can cover for your formulary medications during this coverage phase. However, you will receive a 75% discount for covered formulary brand and generic drugs. You will remain in the donut hole until your total out-of-pocket drug spending reaches $6,550.
3. How do I keep track of my total drug costs and out-of-pocket spend?
Each month you fill a prescription, you will receive an explanation of benefits (EOB) drug summary from your Medicare Part D plan at the end of the following month. This monthly statement will provide you with an overview of your spending as you approach the $4,130 mark (the phase where you enter into the donut hole).
4. What happens when I reach $6,550 total out-of-pocket costs?
This means you will move into the catastrophic coverage phase. This phase is the final stage of the benefit and you will remain here until the end of the calendar year. During this phase you will pay the greater of 5% co-insurance or a $3.70 co-pay for generic drugs and $9.20 co-pay for brand name drugs.
Also note that there is a program called Extra Help for qualifying Medicare beneficiaries. You can contact the Social Security Administration (SSA) office to apply for Low Income Subsidy (LIS). If you are an Aspire Health Plan member, call the number on the back of your Member ID card and ask the Member Service Representative to connect you with an Aspire Member Advocate to help you apply for LIS.