What is the donut hole for prescription drugs?

Asked by: Talia Kuhlman  |  Last update: January 6, 2023
Score: 4.4/5 (6 votes)

Most plans with Medicare prescription drug coverage (Part D) have a coverage gap (called a "donut hole"). This means that after you and your drug plan have spent a certain amount of money for covered drugs, you have to pay all costs out-of-pocket for your prescriptions up to a yearly limit.

What is the donut hole for 2021?

For 2021, the coverage gap begins when the total amount your plan has paid for your drugs reaches $4,130 (up from $4,020 in 2020). At that point, you're in the doughnut hole, where you'll now receive a 75% discount on both brand-name and generic drugs.

What is the Medicare donut hole for 2022?

The Medicare Part D donut hole or coverage gap is the phase of Part D coverage after your initial coverage period. You enter the donut hole when your total drug costs—including what you and your plan have paid for your drugs—reaches a certain limit. In 2022, that limit is $4,430.

How long does the donut hole last?

When does the Medicare Donut Hole End? The donut hole ends when you reach the catastrophic coverage limit for the year. In 2022, the donut hole will end when you and your plan reach $7,050 out-of-pocket in one calendar year.

How do I avoid the Medicare donut hole?

If you have limited income and resources, you may want to see if you qualify to receive Medicare's Extra Help/Part D Low-Income Subsidy. People with Extra Help see significant savings on their drug plans and medications at the pharmacy, and do not fall into the donut hole.

Medicare Donut Hole Explained Simply

17 related questions found

Does the donut hole reset each year?

While in Catastrophic Coverage you will pay the greater of: 5% of the total cost of the drug or $3.95 for generic drugs and $9.85 for brand-name drugs. You will remain in the Catastrophic Coverage Stage until January 1. This process resets every January 1.

What happens when the donut hole ends in 2020?

The Medicare donut hole is closed in 2020, but you still pay a share of your medication costs. Your coinsurance in the donut hole is lower today than in years past, but you still might pay more for prescription drugs than you do during the initial coverage stage.

Is the donut hole the same for everyone?

Most Medicare drug plans have a coverage gap (also called the "donut hole"). This means there's a temporary limit on what the drug plan will cover for drugs. Not everyone will enter the coverage gap.

Do all Medicare Part D plans have a donut hole?

All Medicare Part D plans follow the same drug phases. Every prescription coverage plan involves the gap known as the donut hole. Will I enter the donut hole if I receive Extra Help? Those who get Extra Help pay reduced amounts for their prescriptions throughout the year, so they are unlikely to reach the donut hole.

Is Medicare going to do away with the donut hole?

The Part D coverage gap (or "donut hole") officially closed in 2020, but that doesn't mean people with Medicare won't pay anything once they pass the Initial Coverage Period spending threshold.

How much is the donut hole for 2022?

In a nutshell, you enter the donut hole when the total cost of your prescription drugs reaches a predetermined combined cost. In 2022, that cost is $4,430.

What is the max out-of-pocket for Medicare Part D?

The out-of-pocket spending threshold is increasing from $6,550 to $7,050 (equivalent to $10,690 in total drug spending in 2022, up from $10,048 in 2021).

Does SilverScript have a donut hole?

With SilverScript, you have access to more than 65,000 pharmacies, as well as many preferred pharmacies. The SilverScript Plus plan has no deductible and more coverage during the Part D donut hole, while the SilverScript Choice and SilverScript SmartRx plans offer lower monthly premiums.

Do I need Medicare Part D if I don't take any drugs?

No. Medicare Part D Drug Plans are not required coverage. Whether you take drugs or not, you do not need Medicare Part D.

What is the social security donut hole?

The so called "donut hole" in Social Security refers to a prescription drug coverage gap found in Medicare Part D prescription drug plans. The insurance carrier pays its portion of prescription drug costs, up to a certain amount.

How does Medicare coverage gap discount program work?

Once you reach the coverage gap, you will receive a set discount on the name-brand drugs that you purchase from a pharmacy. While you are in the coverage gap, although you only pay a portion of the drug price, your cost and the manufacturer's cost of the drug will count towards the catastrophic drug phase.

Can you use GoodRx If you are on Medicare?

While you can't use GoodRx in conjunction with any federal or state-funded programs like Medicare or Medicaid, you can use GoodRx as an alternative to your insurance, especially in situations when our prices are better than what Medicare may charge.

How does the Medicare Part D donut hole work?

Most plans with Medicare prescription drug coverage (Part D) have a coverage gap (called a "donut hole"). This means that after you and your drug plan have spent a certain amount of money for covered drugs, you have to pay all costs out-of-pocket for your prescriptions up to a yearly limit.

What is the donut hole with a Medicare Advantage plan?

The “donut hole” essentially refers to where a drug plan may reach its limit on what it will cover for drugs. Once you and your Medicare Part D plan have spent a certain amount on covered prescription drugs during a calendar year ($4,430 in 2022), you reach the coverage gap and are considered in the “donut hole.”

What are the 4 phases of Part D coverage?

The Four Coverage Stages of Medicare's Part D Program
  • Stage 1. Annual Deductible.
  • Stage 2. Initial Coverage.
  • Stage 3. Coverage Gap.
  • Stage 4. Catastrophic Coverage.

Does Medicare pay for prescription drugs?

Medicare offers prescription drug coverage for everyone with Medicare. This coverage is called “Part D.” There are 2 ways to get Medicare prescription drug coverage: 1. Join a Medicare Prescription Drug Plan (PDP).

How does the coverage gap work?

Some Medicare drug plans have a coverage gap. This means that after you and your drug plan have spent a certain amount of money for covered drugs, you may have to pay more for your prescription drugs up to a certain limit.

Why didn't the donut hole go away?

The donut hole was set to disappear in 2020, but it closed faster for brand name drugs in 2019. This is because of the Bipartisan Budget Act of 2018, signed into law by President Donald Trump. Are you looking for Medicare Part D prescription drug coverage?

What is the coverage gap for 2022?

In 2022, the coverage gap ends once you have spent $7,050 in total out-of-pocket drug costs. Once you've reached that amount, you'll pay the greater of $3.95 or 5% coinsurance for generic drugs, and the greater of $9.85 or 5% coinsurance for all other drugs. There is no upper limit in this stage.

When did the donut hole start?

In 2006, the first year of operation for Medicare Part D, the doughnut hole in the defined standard benefit covered a range in true out-of-pocket expenses (TrOOP) costs from $750 to $3,600.