What you need to know about the Medicare donut hole 2024
What is the donut hole?
Medicare Part D prescription drug plans have a limit on the amount they cover for prescription medication during the year. This ‘coverage gap’ is still known as the ‘donut hole’, although the ‘donut hole’ was officially closed in 2020. While many people won’t reach the limit and have to pay out of pocket, it may be very difficult for those who do.
What are the coverage gap (‘donut hole’) limits in 2024?
Stage 1 – Deductible: Depending on your plan, you may have to pay a deductible for your prescription medication before your Medicare prescription drug plan kicks in. Some plans may have no deductible at all, some may have specific tiers, but no plan may have a deductible more than $545 in 2024.
Stage 2 – The Initial Coverage Period: After having spent your deductible and still in need of medication, you will enter the next level, the so-called ‘Initial Coverage Period’. Now, you and your plan must pay up to $5,030 in total for your prescription drugs. You must pay the co-payment/co-insurance according to your plan, while your plan will cover the remainder.
Stage 3 – The Donut Hole/Coverage gap: Once the total expenses for your prescription medication exceed $5.030, you are now in the ‘donut hole/coverage gap’. It will last until there are $8.000 reached. During this stage, you are responsible for paying 25% out of pocket, while the drug manufacturer and your plan have to cover the remaining 75% of the costs. BTW: If you receive ‘Extra Help’ to pay your Part D costs, you won’t enter this coverage gap.
Stage 4 – Catastrophic Coverage: Medicare beneficiaries with more than $8.000 prescription drug cost expenses will get ‘Catastrophic Coverage’. This means, for the rest of the year, you are back to only paying co-payment/co-insurance according to your plan.
These numbers are changing each year, so make sure to always get the latest information.
How can you save money in the donut hole?
- Ask your doctor if there are generic or lower-cost brand-name drugs that may work in the same way as the ones you are currently taking.
- Save money by ordering your prescription drugs from online pharmacies while you are in the donut hole.
- The drugs you take may qualify for Pharmaceutical Assistance Programs (sometimes called Patient Assistance Programs), sometimes offered by pharmaceutical companies for persons enrolled in a Medicare drug plan. To learn if the manufacturer of your medication offers a Pharmaceutical Assistance Program, visit the Health and Drug Plans Coverage Gap Information part of the original Medicare.gov website.
- You may qualify for a State Pharmaceutical Assistance Programs (SPAP). Several states offer a program that helps people with Medicare to pay for their prescription medication. For more information, visit the Health and Drug Plans Coverage Gap Information part of the original Medicare.gov website.
As all Medicare drug plans are different, and the above is only a brief basic description of the more complex rules, please contact your plan provider or Medicare for the exact details applying to you. You can also find more information at https://www.medicare.gov/drug-coverage-part-d/costs-for-medicare-drug-coverage/costs-in-the-coverage-gap
