What is the Part D Donut Hole and Why Does it Matter?

Many individuals with high medication expenses worry about entering the Medicare pat D donut hole. We want to help you understand the Donut Hole so that you can financially prepare for the year to come.

What is the Donut Hole?

The formal term for this period is called the “coverage gap.” It refers to a gap in Medicare Part D prescription coverage. When Medicare beneficiaries reach this gap, their out-of-pocket cost responsibility increases.

In 2021, individuals will enter the donut hole once the value of their covered prescriptions has reached $4,430.

The Donut Hole Closes

While the donut hole isn’t going away, the cost share for those with Part D coverage continues to decrease. In 2022, covered generic and brand name medications are discounted by 75 percent.

Most individuals who enter the donut hole will never spend enough to reach the next phase, which is known as catastrophic coverage. Instead, they’ll pay their coinsurance, which is 25 percent, for covered generics and covered brand-name medications through the end of the year and then restart their medication coverage at the beginning of the next year. For those who reach the catastrophic stage, medication costs drop significantly, and these individuals pay a very low coinsurance or copayment.

Medicare Part D

What to Do if You Hit the Donut Hole

Unfortunately, switching Medicare plans won’t help you avoid hitting the donut hole. For helpful tips on how to save money on expenses in the donut hole, watch this video.

We Can Help – Dayton and Cincinnati Medicare Help

If you’re a client have more questions, our client advisors can answer your specific questions about the donut hole and how it may affect your coverage. Schedule a call today.

Have questions about how to get started with Medicare? Our program advisors can help you get started on your Medicare journey. Schedule a call for more information.

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