With the changes made to Medicare costs in 2020, some people have asked if the “Medicare Part D Donut Hole” is actually gone?
The short answer is technically yes. However, there is still a coverage gap and you should be aware of some of the changes and how they will affect you.
What is the Medicare Part D Donut Hole?
First, we should explain to anyone who hasn’t heard what the Medicare Part D Donut Hole was.
Also known as the coverage gap, the donut hole is the phase of Part D coverage after your initial coverage period. You entered the donut hole when your total drug costs reached a certain limit.
There is still a coverage gap and in 2020, that limit to hit it is $4,020.
What has changed
It used to be that you would pay 100% of your costs when you hit the coverage gap. Now, you’ll pay 25% of the retail cost of medication.
You only exit the coverage gap when your total out-of-pocket spending on your prescription drugs reaches $6,350. After that, you begin catastrophic coverage.
That’s when you pay either 5% of the actual cost of your medications or $3.60 for generic medications and $8.95 for brand-names, whichever is greater.
However, most never leave the initial stage
The vast majority of Medicare beneficiaries do not have to worry about hitting the coverage gap, much less catastrophic coverage.
Less than 20% reached it in 2019 and in 2020 the initial coverage limit was increased to $4,020 (an increase of $200). So, in theory, even less should get to the coverage gap this year.
If you have any questions regarding Medicare Part D or the coverage gap, we welcome you to give us a call at (662) 844-3300 or send us a message through our online form and one of our helpful licensed Medicare insurance agents will get back with you.