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Home / Resources / Medicare Donut Hole: Understanding the Coverage Gap

Medicare Donut Hole: Understanding the Coverage Gap

By Donna Frederick

May 23, 2020

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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 2020, once you have spent $4,020 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 and generic drugs, out of pocket until you reach the catastrophic coverage point. This amount changes every year. In 2020, once your out-of-pocket spending reaches $6,350, 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)

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Originally posted on Jun 24, 2020 07:06:35

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