Is the Medicare Donut Hole Really Closed?

You may have heard that the coverage gap for Medicare Part D prescription drug coverage — commonly known as the donut hole — closed in 2020. While it’s true that recent changes should reduce costs for many beneficiaries, the coverage gap still exists, and costs for some prescriptions may increase in the gap.

Here’s an overview of the four stages of Medicare Part D prescription drug coverage and how prices can vary in the coverage gap. Note that this does not apply to prescription drug coverage offered through Medicare Advantage (Part C) plans.

第一阶段-免赔额. Most Part D plans have an annual deductible that cannot exceed $445 in 2021. You pay the full negotiated price for your prescriptions until you meet the deductible.

第二阶段-覆盖范围. After you meet the deductible, your plan covers part of the cost of your prescriptions. With the standard Medicare model, you would pay 25% of the cost and the plan would pay 75%. 然而, few plans follow the standard model. Most have varying 元钱 or coinsurance for drugs at different “tiers” — for example, progressively higher 元钱 for generics, preferred brand-name drugs, non-preferred brand-name drugs, 以及非常昂贵的药物. This coverage continues until spending by you and your plan reaches the initial coverage limit ($4,130 in 2021, including the deductible).

阶段3 -覆盖缺口. When you exceed the initial coverage limit, you enter the coverage gap (donut hole). In this stage, you pay 25% of the negotiated retail price for all prescriptions. 对于仿制药, your plan pays the other 75%; for brand-name drugs, the drug company pays 70% and your plan pays 5%.

If your plan follows the standard Medicare model in which you pay 25% of the cost of all prescriptions, you would see no difference in the coverage gap, so the donut hole would be effectively closed. 然而, because most plans have different 元钱 or coinsurance for different types of drugs, the 25% of retail price that you pay in the coverage gap may be higher or lower than what you pay during the coverage stage. It could be substantially higher for very high-cost drugs. The good news is that you remain in the coverage gap only until you reach the out-of-pocket spending limit, 这是6美元,550 in 2021. This includes your out-of-pocket expenses (deductible, 元钱, and coinsurance) and the 70% paid on your behalf by drug companies; it does not include payments by your plan.

Stage 4 — Catastophic coverage. After you reach the out-of-pocket spending limit, you pay a relatively small amount per prescription for the rest of the year: the greater of 5% of the plan’s negotiated retail price or a flat fee ($3.仿制药70美元,9美元.20 for all other drugs in 2021).

For additional information on Medicare Part D drug coverage, see 医疗保险.gov / drug-coverage-part-d.