Is the Medicare Donut Hole Really Closing? Facts vs. Fiction
In March 2018, President Trump signed a congressional budget deal that included changes to the timeline for closing the Medicare Part D coverage gap, also called the “donut hole.” You may have heard other health plans tell you the donut hole will completely close in 2019. That isn’t completely true.
People with Medicare Part D who have high prescription drug expenses currently pay more once the total cost of their medicines reaches a certain level. Since the Affordable Care Act (ACA) was passed in 2010, the donut hole has narrowed each year. The coverage gap was scheduled to close in 2020, and people with Part D would pay 25 percent of the cost of all their prescriptions until they reach catastrophic coverage.
What this means for you
The budget deal passed by Congress and signed by the President included changes to the coverage gap as follows:
- Certain drug manufacturers will now pay a higher share of the cost of brand-name drugs. Currently brand-name drug manufacturers offer a 50 percent discount toward the cost of a brand-name drug; the new law increases the discount to 70 percent.
- Members who reach the coverage gap stage in 2019 will pay 25 percent of the cost for their brand name drugs, and their Part D plan will pay 5 percent of the cost.
Members in the coverage gap in 2019 will also pay 37 percent of the cost of their generic drugs, and their Part D plan will 63 percent of the cost. Depending on the drug, that could be a significant out-of-pocket cost.
As a reminder, people who receive Extra Help (low-income subsidy) paying for their Part D plan do not have a coverage gap.
In 2020, after the coverage gap is gone, everyone with a Part D plan will have the same level of cost sharing (about 25 percent) from the time you meet your deductible until you reach catastrophic coverage. Catastrophic coverage starts when your total out-of-pocket costs and the manufacturer’s costs reach a certain amount. After that, you pay the greater of $3.40 copay or a 5 percent copay for your as medicare defines generic prescription drugs. You will pay the greater of $8.50 or a 5 percent copay for your brand-name prescription drugs.
Review your coverage needs
Starting October 15, you will have an opportunity to review your prescription drug coverage and make a change to your plan for next year plan if needed. Some Florida Blue Medicare plans include gap coverage for generics and/or brand drugs. Plans with gap coverage help keep your out-of-pocket costs down if you enter the donut hole. Instead of paying the higher costs of drugs during the Coverage Gap stage, you would generally pay the same cost share you did while in the Initial Coverage Stage. Visit a Florida Blue Center or talk to a licensed agent to go over your prescription drugs and how we cover them.
You can trust Florida Blue to answer your questions and help you find the prescription drug plan right for you.
Filed under: Medicare