Frequently asked questions about the Medicare Part D coverage gap
What is the Medicare Part D doughnut hole?
Some Medicare Part D drug plans have a coverage gap, also known as the doughnut hole. This means that after you and your drug plan have spent a certain amount of money for covered drugs you may have to pay for your prescription drugs up to a certain limit.
You now get a discount on brand-name and prescription drugs while you are in the Medicare Part D coverage gap. Exactly how much you pay out of pocket varies widely depending on the Part D plan you are in and the price your plan has negotiated with the companies that manufacture your drugs. These discounts will increase until 2020, when the coverage gap disappears. Your discounts in the coverage gap depend on a number of factors as explained in the answers below.
How will I know if I’ve reached the coverage gap?
Every month that you fill a prescription, your Medicare Part D drug plan mails you an explanation of benefits (EOB). The EOB tells you how much you've spent on Medicare Part D covered prescription drugs. It also tells you if you’ve reached the coverage gap.
Who can get the coverage gap discounts?
If you're enrolled in a Medicare prescription drug plan or a Medicare Advantage plan that includes prescription drugs you get discounts on the drugs that are covered by your plan once you’re in the coverage gap.
How does the drug discount work while I’m in the coverage gap?
Once you reach the coverage gap, you automatically get a discount on your prescription drugs at the time you buy them. The discount is applied to the price that your Part D plan has negotiated. You still need to pay any pharmacy fees, or dispensing fees, when you fill your prescription. These dispensing fees are not included in your discount for brand-name drugs, but are included when figuring the discount for generic drugs.
Does the discounted price or the full drug price count toward the amount I need to reach catastrophic coverage?
The full price of brand-name drugs, including the dispensing fee, will count toward the amount you need to qualify for catastrophic coverage. For generic drugs, the discounted amount you pay will count toward getting you out of the coverage gap.
Updated August 2013