The Medicare “donut hole” refers to a coverage gap in the Medicare Part D prescription drug plan. This gap occurs when a person’s total drug costs (including both what they and their insurance plan have paid) reach a certain threshold, at which point they are responsible for paying a larger portion of their drug costs out-of-pocket until their costs reach a certain limit. This limit is called the “catastrophic coverage” threshold, after which the insurance plan pays for most of the person’s drug costs for the rest of the year.

The donut hole was created as a result of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, and its purpose was to help control the cost of the Medicare Part D program. However, it has been criticized for making it more difficult and expensive for people with high drug costs to access the medications they need.

The Affordable Care Act has gradually closed the donut hole, and as of 2020, beneficiaries are responsible for 25% of the cost of their drugs while in the coverage gap, with the remaining 75% covered by the Part D plan or through discounts provided by drug manufacturers. By 2020, the coverage gap will be completely eliminated.

It’s important to note that not all Medicare beneficiaries will enter the donut hole, as it depends on the amount of money spent on prescription drugs. Additionally, some beneficiaries may not even be enrolled in a Medicare Part D plan and therefore will not be impacted by the donut hole.

If you have Medicare and have questions about your specific coverage and how the donut hole may affect you, it’s best to contact your Medicare advisor for more information.

Working with a New York City Medicare agent can help make the process of enrolling in Medicare easier and less overwhelming. They can provide you with the guidance and support you need to find the right plan for your needs, and they are available to answer your questions and provide ongoing support. The advisors at Plan Medicare in New York City and Long Island can take the time to discuss the Donut Hole with you and how it will impact your