Part D Donut Hole Explained

Medicare Part D offers coverage for prescription drugs, but the donut hole refers to a coverage gap in Medicare Part D.

This means there is a limit put in place on the amount your drug plan will cover. For 2021, if you and your plan together have spent a total of $4,130 on covered prescriptions, you will enter the donut hole. 

Brand-Name And Generic Prescriptions

If you enter the donut hole, you will pay about 25% of the cost for your brand-name prescriptions, while your plan and the manufacturer will pay 75%. Overall, what you and the manufacturer pay will help you get out of the coverage gap. 

For generic prescriptions, you will once again pay the remaining 25% of what’s left of the cost after Medicare pays its 75%. However, the 25% you pay will be the only amount that goes towards the coverage gap.

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What Goes Towards Your Coverage Gap?

There are several factors to be aware of that could or could not go towards your coverage gap. Items that do go towards it include:

  • What you pay
  • Any discounts you get for brand-name prescriptions
  • Your deductible, copayment, and coinsurance

Items that do not go toward it include:

  • Your Part D premium
  • The dispensing fee (you will typically pay 25% for this while your plan will pay 75%)
  • The amount you pay for prescriptions that aren’t covered by your Part D plan

Part D Extra Help

Part D Extra Help program helps to cover prescription drug copays, plan premiums, and other costs. It is meant for people with limited income who may have a hard time paying for their Part D costs. To qualify for the program, your income must fall within the set limits. 

For those who get Extra Help, they will not enter the donut hole, or coverage gap.

If you would like more information on Part D plans and what to expect for the donut hole, feel free to call us at (541) 915-0939.