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Understanding the Medicare Coverage Gap

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Understanding the Medicare Coverage Gap

What is the Medicare Coverage Gap?

The coverage gap in Medicare Prescription Drug Plans (PDP) and Medicare Advantage plans with prescription drug coverage (MA-PD plans) is also known as the "donut hole."

The coverage gap is the point where you become responsible for paying up to 79% of generic drug prescription costs and approximately 47.5% of brand-name drug prescription costs.

The coverage gap is a standard guideline set by Medicare. All PDP and MA-PD plans have a coverage gap, but some plans offer additional coverage to help get you through the coverage gap.

You reach the coverage gap after your total yearly drug costs (paid by you and your plan) have reached $2,970 not including premium payments. At that point, you become responsible for paying 79% of your generic prescription costs and a discounted price for your brand-name prescription costs of approximately 47.5% until you have paid $4,750 in yearly out-of-pocket costs (unless your plan offers additional coverage during the gap), as this chart below explains. Depending on how many prescription medicines you use a year, you may not reach the coverage gap.

How the Coverage Gap Works
1 100% out-of-pocket. Deductible & annual premiums (if applicable).
2 25% out-of-pocket and 75% paid by Medicare. Percentages you and your plan pay before your total drug costs reach $2,970.
3 79% out-of-pocket and 21% paid by Medicare. What you pay for generic drugs after your total yearly drug costs have reached $2,970 and until your yearly out-of-pocket costs reach $4,750 (called the Coverage Gap). During this phase, you'll pay a discounted price of approximately 47.5% for brand-name drugs.
4 5% out-of-pocket and 95% paid by Medicare. Only if your yearly out-of-pocket drug costs exceed $4,750.

  Out of pocket costs icon keyYour out-of-pocket costs
  Plan's contribution to costs icon keyPlan's contribution to costs

More 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 covered formulary generics, 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.

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

Some brand-name drugs cost less than others. If your drug is not on your plan's drug formulary, you may pay more for it. We’re happy to give you a list of similar drugs on our formulary that will 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.

You may be able to get Extra Help to pay for your prescription drug premiums and costs.

Get more information and see if you can qualify for Extra Help.

Coverage Gap:

The third stage of Medicare Prescription Drug Coverage (following the Initial Coverage stage). For 2013, you reach the Coverage Gap after the total annual drug costs paid by you and your plan have reached $2,970 not counting your premium payments. In the Coverage Gap, you are responsible for paying 79% of generic drug costs and 47.5% of the cost of brand-name drugs until you have paid $4,750 in true out-of-pocket costs. Note: these dollar limits are subject to change each year.

Generic Drug:

Generic drugs have the same active-ingredient formula as a brand-name drug. Generic drugs usually cost less than brand-name drugs and are rated by the Food and Drug Administration (FDA) to be as safe and effective as brand-name drugs.

Disclaimer Information:

Medicare Complaint Form. For more information, visit Medicare.gov or Medicare's Ombudsman. (By clicking on these links you will be leaving our website).

You must continue to pay your Medicare Part B premium.

The benefit information provided is a brief summary, not a complete description of benefits. For more information contact the plan.
Limitations, copayments, and restrictions may apply.
Benefits, formulary, pharmacy network, premium and/or copayment/co-insurance may change on January 1 of each year.

Plan performance Star Ratings are assessed each year and may change from one year to the next.

This information is available for free in other languages. Please contact our customer service number at 1-866-249-8668, 8:00 a.m. to 8:00 p.m. in your local time zone (TTY users call 711) 7 days a week. This document may be available in other formats such as Braille, large print or other alternate formats. This document may be available in a non-English language. For additional information, call customer service at the phone number listed above.

Esta información está disponible sin cargo en otros idiomas. Para obtener más información, comuníquese con el Servicio de Atención al Cliente al número 1-866-249-8668, de 8:00 a.m. a 8:00 p.m. en su zona horaria local (los usuarios de TTY deben llamar al 711) los 7 días de la semana.

Este documento puede estar disponible en otros formatos, como Braille, letra grande o otros formatos alternativos. Este documento puede ser disponible en un idioma no inglés. Para obtener más información, llame al servicio al cliente en el número de teléfono que aparece arriba.

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