When the Medicare Donut Hole Takes a Bite Out of You.

If you spent more than $3,700 on covered drugs in 2017, you know all about the donut hole. It’s the dreaded coverage gap when your initial coverage ends and you enter Phase 3 of your Part D plan. In 2018, the out-of-pocket amount increases slightly to $3,750.
If you land in the donut hole, your covered Medicare drug costs will be different. In 2018, you will pay 35% of brand-name drugs and 44% of generic drugs. You will need to reach another benchmark before you can get out of the donut hole. In 2018, this amount will be $5,000. Then, you reach the catastrophic coverage phase, which we will tell you more about in the next blog.
Thanks to the Affordable Care Act, these discount percentages are decreasing each year until 2020 – assuming Congress leaves this part of the Act alone.
The amounts you pay for drugs while in the donut hole count toward getting you out. They differ for brand vs. generic, however. For brand-name drugs, part of the amount that the manufacturer discounts the drugs is included, so 85% of the price will count as out-of-pocket costs. For generic drugs, only the amount you actually pay counts toward getting you out of the hole.

So what does count toward getting out of the coverage gap?
 Your annual deductible, coinsurance and copayments
 Discount you get on brand-name drugs in the gap
 What you actually pay in the gap
What does not count?
 Your premiums
 Pharmacy dispensing fees
 Cost for drugs not covered in your plan

Also, if you are getting Extra Help paying Part D costs, you will not go into the donut hole.
All of this – the donut hole and/or catastrophic coverage – ends on December 31st, when the phases in your plan start anew on January 1. If you plan has a deductible, you will start again in Phase 1. If not, Phase 2.
You also need to check your plan for its donut-hole costs. Some plans have higher savings in the gap than others. Call me to discuss (941-505-7911). You should know when and if the donut hole is waiting for you.
We wish you Happy Holidays and a prosperous and healthy New Year.

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