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What to Know About the Donut Hole
The Medicare Part D Coverage Gap (also called the “donut hole”) is one of four stages you might encounter each year as a member of a plan with Part D prescription drug coverage.
What is the “donut hole”?
Basically, it’s a temporary limit on how much your drug plan will pay. During this stage, you might have to pay a higher price for your medications until the next January 1, or until your out-of-pocket costs qualify you for the next level of insurance, which is called the Catastrophic Coverage stage.
How do the four coverage stages work?
A prescription drug deductible is the amount you must pay out-of-pocket before your plan begins to pay its share. If you are a member of CarePartners of Connecticut’s Care Advantage Preferred or Care Advantage Prime plan:
There is no deductible for drugs on Tier 1 and Tier 2.
The CareAdvantage Preferred plan has a $200 deductible for drugs on Tier 3, Tier 4 and/or Tier 5. The CareAdvantage Prime plan has a $150 deductible for drugs on Tier 3, Tier 4 and/or Tier 5.
Any combination of drugs on Tiers 3, 4, and/or 5 counts toward your deductible. You don’t pay a separate deductible for each tier.
You move into the next coverage stage once you’ve met the deductible.
The CareAdvantage Premier plan has no Part D deductible.
Initial Coverage stage
During the Initial Coverage stage, you’re responsible only for your copay for drugs on Tiers 3, 4 and 5.
This stage ends when the total cost of your drugs (your copay PLUS the amount that your plan pays) reaches $4,020. You then enter the Coverage Gap.
Coverage Gap stage (the donut hole)
While in this stage, you pay 37% of the cost of generic (non-brand name) Part D medications. Your plan pays the remaining 63% of the cost.
You pay 25% of the cost of Part D brand name medications. The drug manufacturer pays 50% of the cost of Part D brand name medications and your plan pays the remaining 25%.
The entire cost of the Part D brand name drug — minus the 25% that your plan pays — goes toward your out-of-pocket maximum of $6,350.
Once your total out-of-pocket costs reach the maximum of $6,350 (what you’ve paid PLUS what the drug manufacturer has paid), you enter the Catastrophic Coverage stage.
Catastrophic Coverage stage
While in Catastrophic Coverage, you pay the greater of: 5% of the total cost of the drug or $3.60 for generic drugs and $8.95 for brand-name drugs.
You stay in the Catastrophic Coverage stage until the end of the year. This process resets on January 1.
What can you do to avoid reaching the donut hole?
You might qualify for help with the cost of certain medications through prescription assistance programs offered by the drug manufacturer. Every drug manufacturer has certain criteria that you must meet to qualify. If you need assistance, contact Customer Service.