The Part D coverage gap used to be known as the “Doughnut Hole”. The donut hole relates to a gap in the Medicare Part D coverage. The gap in coverage affects many seniors that take several name brand drugs or many drugs that carry a high price tag. Seniors with a Medicare drug plan start the year with coverage for their drugs. If their drug costs reach a certain point they go into the gap where they have lower coverage for their drugs. After they have spent a large amount of money they come out of the gap and have what is considered catastrophic coverage.
The numbers for the gap for 2011 are as follows: Coverage Gap begins at $2,840 and goes until $4,550
During the gap you must pay 50% of name brand drugs and 93% of generic drugs. You pay around $2 – $6 for drugs once you are in catastrophic coverage.
NOTE: The plan costs and your costs for the drugs count toward getting you into the gap. Only your costs for drugs count toward getting you out of the gap! This makes it harder for seniors to get out of the coverage gap. There are several things that I recommend to my clients to help them avoid the Coverage Gap, or lower their costs during the coverage gap. Please see my article on Avoiding the Medicare Part D Donut Hole for these great tips!