What Is The Donut Hole?

The Donut Hole is a predefined limit of coverage on your medications that varies by plan and stage of the Donut Hole you are in.

These limits are determined each calendar year, and the following date is for the plan year 2023. The coverage gap and the donut hole are used interchangeably in terminology, so you may hear it called either of the two ways.

What Will I Pay In The Coverage Gap For My Medications?

In 2023, the Donut Hole has the following limits and stages:

• Deductible Stage

- You will begin in the Deductible Stage of the Donut Hole (if applicable) based on your current prescription drug plan (Part D plan).

- In this stage, you will have to pay the full cost of your medications until you meet the deductible determined by your plan.

• Initial Coverage Stage

- In this stage of the Donut Hole, your plan will pay a portion of the prescription drug cost, and you as the beneficiary will pay the determined copay or coinsurance percentage, based on the tier that the drug is in and what pharmacy you use (i.e. if your current pharmacy is in-network).

- You will remain in the Initial Coverage Stage until you and the plan pay $4,660 on medications covered by the formulary.

• The Coverage Gap Stage (the “Donut Hole”)

- To enter the Donut Hole, you and the plan have paid $4,660.

- Once you enter the Donut Hole, you as the beneficiary will be responsible for a higher cost of your covered medications for a period of time. Typically, during the coverage gap, the coinsurance for covered medications is 25%; however, depending on the plan, the cost per medication may be less. According to medicare.gov, beneficiaries will never pay more than 25% during this stage.

- You will remain in the Donut Hole until the out-of-pocket costs equal $7,400. As a reminder, these values change each year, and this data is for the plan year 2023.

• The Catastrophic Coverage Stage

- As soon as the out-of-pocket costs reach $7,400, you will enter the Catastrophic Stage of the Donut Hole.

- Once you enter the Catastrophic Coverage Stage, you will remain in this stage for the remainder of the calendar year and pay a lower cost for your medications.

References:

1. What is Medicare Part D?. Florida Blue. (2023, March 21). https://www.floridablue.com/medicare/education/part-d

2. Costs in the coverage gap. Medicare. (n.d.). https://www.medicare.gov/drug-coverage-part-d/costs-for-medicare-drug-coverage/costs-in-the-coverage-gap

3. SingleCare. (2023, April 10). What is the Medicare “donut hole”? The Checkup. https://www.singlecare.com/blog/medicare-donut-hole/