The Medicare coverage gap is the phase of your Medicare Part D benefit when there is a gap in prescription drug coverage. You might not reach this stage at all; it starts if you and your plan spend a certain amount of money within a year, as described below. During this phase, you may have to pay more for your drugs, until you reach the catastrophic coverage phase. Note that some plans don’t include this coverage gap.
Most Medicare Advantage Prescription Drug plans and Medicare Prescription Drug Plans have a coverage gap, or “donut hole.” The coverage gap is reached when your total drug costs (what you and your plan pay) reach a certain amount ($3,700 in 2017). You then pay for a certain portion of prescription drug costs out-of-pocket until entering the plan’s catastrophic coverage phase. This is when your total out-of-pocket costs, including the annual deductible and copayments/coinsurance, reach $4,950 in 2017.
Some Medicare Advantage Prescription Drug plans and stand-alone Medicare Prescription Drug Plans provide partial or full coverage during the coverage gap. For example, some plans may not have a gap at all, while others may offer generic drug coverage in the gap. Plans with gap coverage often charge a higher monthly premium, so you may only want to consider one of these plans if you have high drug costs and expect to reach the coverage gap.
How does the Affordable Care Act affect the coverage gap?
Until 2020, when the coverage gap will be closed, you’ll pay gradually less for both generic and brand-name medications.
- In 2017, you’ll pay 40% for brand-name drugs and 51% for generic drugs.
- In 2018, you’ll pay 35% for brand-name drugs and 44% for generic drugs.
- In 2019, you’ll pay 30% for brand-name drugs and 37% for generic drugs.
- In 2020, you’ll pay 25% for brand-name drugs and 25% for generic drugs.
How can I delay reaching the coverage gap?
There are a number of things you can do to help lower your prescription drug costs all year long and delay reaching the coverage gap:
- Talk to your doctor about using lower-cost generics that are right for you.
- Find out if any of your local pharmacies offer your prescription drugs at a reduced cost.
- If there are any prescription medications you take on an ongoing basis, consider using your Medicare Prescription Drug Plan’s mail-order pharmacy if available. This might save you money with many plans.
- Use a “preferred” pharmacy if your plan has both preferred and non-preferred pharmacies in its network. Your copayments may be lower if you fill your covered prescriptions at a preferred pharmacy.
- Use your plan’s member card when purchasing your prescriptions. When you use your prescription drug plan card, you might get discounted rates on the drugs you buy, and your costs apply toward your deductible.
- Look for programs that offer assistance. There may be State Pharmaceutical Assistance Programs available in your state, which might assist with Medicare Part D costs. Visit Medicare.gov to find out if there’s a Pharmaceutical Assistance Program for the medications you take.
If you do reach the coverage gap, you may be able to keep your drug costs down by using lower-cost generic drugs whenever possible (if your prescribing doctor agrees) or using your plan’s mail-order pharmacy.
Do you have questions about the Medicare coverage gap? Would you like some help choosing a Medicare Advantage Prescription Drug plan or Medicare Prescription Drug Plan? I would be more than happy to help you find prescription drug coverage that may work for you.