The Infamous Donut Hole – Medicare Part D
Beware the gap or infamous donut hole in Part D policies outlined here:
- Once you and your insurance company have paid a combined amount of $3,310 for covered drugs in the year, the percentage of your coverage decreases.
- You will pay 45% of the cost on brand name prescriptions and 65% on generic drugs until you reach a combined total of $4,850 that you and your plan have paid.
- There is also a 50% discount on brand name drugs, which is added to your out-of-pocket total.
- Once you reach $4,850, you enter the catastrophic coverage phase. Here you pay the lesser of 5% or $6.60 per prescription medication.
Fortunately, the percentage paid while in the gap is slowly being reduced. It will be 25% of both brand name and generic drugs by 2020.
Excerpt from The New Retirement Basics: The Quick and Easy Guide to Social Security and Medicare 2016
by Donna Davis
