You've probably heard about the "donut hole" if you're enrolled in a Medicare prescription drug (Part D) plan or Medicare Advantage Plan with drug coverage. To learn more about the donut hole, see "Donut hole" closing.
The donut hole is a gap in coverage after you've already spent money for covered drugs. Before health care reform, you may have had to pay the full price for prescription drugs, up to a certain amount, when you were in this gap. Now, the health care reform law is closing the donut hole so your prescriptions are more affordable.
Here's how it will work. For brand-name drugs covered by Medicare:
In 2013, you pay: 47.5% of the cost when you're in the donut hole.
Between now and 2020, you'll pay less and less each year until you pay just 25% of the brand name drug's cost.
You'll also save when you get generic drugs:
In 2013, you pay 79% of the generic drug's cost in the coverage gap.
You'll pay less each year until you pay only 25% of the drug's cost by 2020.
You don't need to do anything to get the discount, it will happen as you fill your prescriptions. Remember to work with your drug plan to make sure that your records are correct.
How it impacts you
You'll pay less each year for your prescriptions as the gap in coverage is closed. You get this discount when paying for your medication at a pharmacy or through mail order.
How do I know when I've reached the donut hole?
Every month that you fill a prescription, your drug plan will send you an Explanation of Benefits (EOB) showing how much you spent on your covered drugs. The EOB will tell you if you've reached the "donut hole" or coverage gap.
Are all brand-name drugs discounted?
If a drug company agrees to take part in the discount program, all covered Part D brand-name drugs they make are covered when you are in the donut hole, and more than 99% of the brand-name drugs used by Medicare members are part of the program. This means the chances of your brand-name medication being covered are good.
How do I find out if a prescription will be discounted?
Check with your drug plan or ask your pharmacist if the medications are discounted when you are in the donut hole. If a drug isn't covered, ask your doctor if there's a generic version or a different medication you can take.