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Medicare Basics

Medicare Donut Hole

The Donut Hole is the coverage gap that occurs when you and your Medicare drug plan have reached a pre-determined spending limit for covered drugs and you begin to pay for your drugs "out-of-pocket." For example, in 2019, once you have spent $3,820 on covered drugs, you enter the coverage gap.

While in this coverage gap, you will pay no more than 25 percent of the cost for brand name drugs, (37 percent for generic drugs) out of pocket until you reach the catastrophic coverage point. This amount changes every year. In 2019, once your out-of-pocket spending reaches $5,100, you leave the donut hole and enter catastrophic coverage. Once you reach this point, coverage under your Medicare drug plan begins again and you pay only a small co-insurance or copayment for each prescription until the end of the year.

Medicare Prescription Drug Coverage Gap (Donut Hole)

Medicare Prescription Drug Coverage Gap (Donut Hole)