Are You in the Medicare Part D Donut Hole?
What is the Donut Hole?
The Medicare Part D Donut Hole, or Coverage Gap, is one of four stages you may encounter during the year while a member of a Part D prescription drug plan. Specifically, the Donut Hole is the point in the year when your prescription benefits change because the total cost paid by you and the plan have reached the Initial Coverage Limit. If you enter the Donut Hole, you may have to pay a higher price for your medications until the next January 1, or until your out-of-pocket costs qualify you for another level of insurance called Catastrophic Coverage.
The Four Coverage Stages
To determine how your prescription drug costs are covered, there are four coverage stages. This process resets on January 1st each year.
1 Deductible Stage
CarePartners of Connecticut HMO and PPO plans have $0 prescription drug deductibles. You begin each coverage year in the Initial Coverage Stage.
2 Initial Coverage Stage
This is the stage in which most members of a Part D prescription drug plan will start. You remain in the Initial Coverage Stage until the total cost of your drugs (what you pay plus what CarePartners of Connecticut pays) reaches $4,660. This amount is called the Initial Coverage Limit. Once you reach the $4,660 amount, you enter the Coverage Gap Stage, also known as the Donut Hole.
3The Donut Hole (Coverage Gap Stage)
While in this stage, you are responsible for:
- 25% of the cost of generic (non-brand name) Part D medications. CarePartners of Connecticut pays the remaining 75% of the cost.
- 25% of the cost of Part D brand name medications. The drug manufacturer pays 70% of the cost of Part D brand name medications and CarePartners of Connecticut pays the remaining 5%. The entire cost of the Part D brand name drug, minus the 5% that CarePartners of Connecticut is responsible for, goes toward your out-of-pocket maximum of $7,400.
Once your total out-of-pocket costs reach the maximum of $7,400, you enter the Catastrophic Coverage stage.
What items can I count towards the Coverage Gap Stage?
- Your yearly deductible, coinsurance, and copayments
- Discount you get on brand-name drugs in the Donut Hole
- What you pay in the Donut Hole
What items can I NOT count towards the Coverage Gap Stage?
- Drug plan premium
- Pharmacy dispensing fee
- What you pay for drugs that are not covered
4 Catastrophic Coverage Stage
You enter the Catastrophic Coverage stage when your total out-of-pocket costs (what you pay PLUS what the drug manufacturer pays) reach $7,400. While in Catastrophic Coverage you will pay the greater of: 5% of the total cost of the drug or $4.15 for generic drugs and $10.35 for brand-name drugs. You will remain in the Catastrophic Coverage Stage until January 1. This process resets every January 1.
Need an easy way to reference the Donut Hole?
Use this handy Donut Hole summary sheet: Medicare Donut Hole Step-by-Step
Getting close to the Donut Hole and need help?
Help is available if you are in the Donut Hole or are getting close to it. There are many resources available to individuals who reach, or at risk of reaching, the gap:
Low Income Subsidy (LIS), or Extra Help: LIS is an income-based assistance program run by the Social Security Administration. If you qualify, you may receive help paying for your monthly premium and prescription drug copays. For more information, contact Medicare at 1-800-633-4227 (TTY: 1-877-486-2048) or the Social Security Office at 1-800-772-1213 (TTY: 1-800-325-0778).
Pharmaceutical Company Prescription Assistance Programs: You may also 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 in order to qualify for help. If you need assistance, contact Member Services at 1-888-341-1507 (HMO) or 1-866-632-0060 (PPO) (TTY: 711).