What is the Medicare Coverage Gap?

There are four stages of prescription drug coverage in Medicare Prescription Drug Plans (PDP) and Medicare Advantage plans with prescription drug coverage (MA-PD plans).

  • The first stage is the Yearly Deductible. This is the amount you must pay before your drug plan begins to pay its share of your covered drugs. Some plans do not include a yearly deductible. If your plan includes a deductible, you will usually pay the full cost of your drugs up to the deductible amount. Once you reach the deductible amount (if applicable) you move in the next stage, the "Initial Coverage Stage."

  • In the Initial Coverage Stage the plan pays its share of the cost and you pay your share of the cost (copayment or coinsurance) for each prescription you fill. You will remain in this stage until the total yearly drug costs (paid by you and your plan) reach $3,700. You will then enter the next stage called the "Coverage Gap."

  • The Coverage Gap (also known as the "donut hole") is the third stage. In the Coverage Gap you may receive limited coverage on certain drugs and receive a discount on generic and brand-name drug prescription costs. The Coverage Gap is a standard guideline set by Medicare. All Medicare plans with prescription drug coverage have a Coverage Gap, but some plans offer additional coverage to help get you through this stage. You remain in the Coverage Gap until your total yearly drug costs reach $4,950.

  • If your total drug costs are higher than $4,950 for the year, you enter the last stage of coverage called "Catastrophic Coverage." In this stage, you pay a small copayment or coinsurance for your drugs for the rest of the calendar year.

  • Deductible
    You may need to pay 100% of your deductible and annual premiums

    (if applicable)
  • Initial Coverage
    Drug costs less than $3,700
    You pay 25%
    Plan pays 75%
  • Coverage Gap
    Drug costs between
    $3,700 and $4,950
    You pay 51% for generic drugs and 40% for brand name drugs
  • Catastrophic Coverage
    Drug costs over $4,950
    You pay 5%
    Plan pays 95%

Questions About the Coverage Gap

How can I avoid reaching the Coverage Gap?

Using lower cost drugs is the easiest way to avoid reaching the Coverage Gap. Our MA-PD plans offer low copays for generic drugs and select brand-name drugs. By using lower cost drugs or generic drugs on our plans formulary, you won't reach the Coverage Gap as quickly, and in some cases, not at all. Check with your doctor or pharmacist about using lower cost drugs. Mail-order on routine prescriptions is also a great way to save.

My medicine is not available in a generic version. Is there anything else I can do?

Some brand-name drugs cost less than others. We're happy to give you a list of alternative drugs on our formulary that may be less expensive if available. Then, ask your doctor if the similar drug is safe and effective for you and if he or she will prescribe it.

Is there any other assistance available to help me pay for my prescription drug coverage?

If you meet certain eligibility requirement, you may qualify for the Extra Help program. This program helps cover up to 100% of your prescription drug premiums and copays. Get more information and see if you can qualify for Extra Help.

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