What is the Medicare Part D “donut hole”? (And how can I avoid it?)

At ApexHealth, we want to give you the information you need about health care and health insurance so you can take charge of your health and live life boldly. This includes learning about and managing your prescription drug costs and coverage. We’ve already gone over the basics of Medicare Part D, the part of Medicare that covers prescription drugs. Now, it’s time to take things a step further and explain a term you may have heard before – the coverage gap, also known as the “donut hole” – in reference to Medicare Part D.

What is the Medicare Part D “donut hole”?

The coverage gap, aka “donut hole,” is a term used to describe a gap in prescription drug coverage where you may pay more for prescription drugs, depending on what Part D plan you choose (or if you enroll in a Medicare Advantage plan that includes prescription drug coverage, also known as an MAPD plan). You enter the donut hole when your total drug costs – including what you and your plan have paid for your drugs – reach a certain limit, set annually. During that time, you may be responsible for a percentage of your prescription drug costs.

What are the four Medicare Part D coverage stages?

Learning about the different coverage stages of your Medicare prescription drug coverage may help you manage your costs over the course of your plan year:

1. The annual deductible stage – You pay the full cost of your covered prescription drugs until you reach your deductible.
2. The initial coverage stage – Once the deductible is met, members move into the “Initial Coverage” stage, during which members pay a copayment or coinsurance for each covered prescription drug, and the plan pays its share, until “total drug costs” (including the deductible and retail costs of drug purchases) reach the Initial Coverage Limit (ICL).
3. The coverage gap stage – The coverage gap (also called “donut hole”) begins after you have reached the initial coverage limit. When you’re in the coverage gap, you will pay no more than 25% of the cost for your plan’s covered brand-name or generic prescription drugs. The coverage gap ends when you have spent enough to qualify for catastrophic coverage.
4. The catastrophic coverage stage – This is the drug coverage stage that you’ll stay in for the remainder of the year after you get out of the coverage gap. With catastrophic coverage, you pay a reduced amount for covered drugs for the rest of the year.

How can I avoid the Medicare Part D “donut hole”?

Your Part D or MAPD plan will keep track of how much you’ve spent on covered prescription drugs each year. Keep track by looking at your monthly statements! There are steps you can take to slow down or avoid entering the donut hole each year:

1. Consider generic drugs whenever possible
2. Make sure your prescribed drugs are included on your plan’s formulary
3. See if you qualify for the Medicare Part D Extra Help program

Make sure you check out our previous blog post about taking an active role in managing your prescriptions for more tips.

What is the Medicare Part D Extra Help program?

Extra Help is a program to help people with limited income and resources pay for prescription drugs. Extra Help may lower your premiums, copays or coinsurance. It also helps provide coverage throughout the coverage gap and waives any Part D late enrollment penalty. Note, if you have Extra Help, you won’t have a coverage gap.

How can I apply for the Extra Help to pay for my prescription drugs?

There are multiple ways to apply for Extra Help. Here are three ways to start:

1. ApexHealth members can receive help with submitting your application from your ApexAssistant. They’re available seven days a week, from 8 a.m. to 8 p.m. local time from October 1 – March 31 and Monday to Friday, 8 a.m. to 8 p.m. local time from April 1—September 30. Call 1- 844-279-0508 (TTY users should call 711).
2. Apply online at Social Security’s website.
3. Call Social Security at 1-800-772-1213 or TTY: 1-800-325-0778, Monday to Friday, 8 a.m. to 7 p.m.

Remember that Medicare coverage can be confusing, but it doesn’t have to be! Our ApexAssistants are here to answer any questions you might have. Reach out to us at (844) 279-0508 (TTY 711). Our hours of operation are Monday through Friday 8 a.m. – 8 p.m. (local time) from Apr. 1 through Sept. 30 and seven days a week 8 a.m. – 8 p.m. (local time) from Oct. 1 through Mar 31.

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