How does the donut hole work in 2024?
Before we answer this question, let’s first explain: What exactly is the Medicare Part D donut hole?
The donut hole describes the situation where seniors, solely relying on a Medicare Part D drug prescription plan without additional private prescription drug insurance, have to spend an arm and a leg for their medication once they reach a threshold. They will have to pay out-of-pocket for their prescription drug costs, once the total cost of their annual prescription drugs reaches the annual initial coverage limit that is set by Medicare ($5,030 for 2024).
Here is how it works: Let’s assume you have a Medicare Part D prescription drug plan, but no other insurance that would cover costs for medication, and you need a lot of expensive prescription medication. Every month, you pay your premium. When you get prescription drugs that are covered by your plan, you have to pay your share, co-payment/co-insurance, and, depending from your plan, a deductible of up to $545. Once you paid a total of your prescription drugs of $5.030, you are entering a ‘coverage gap’.
Until you will have spent $7.999, you are now responsible for 25% of the payment for your prescription medication, while your plan and the manufacturer cover the remainder of 75%. This gap in coverage is also known as the ‘donut hole’.
Once the total cost of your prescription drugs exceeds the annual threshold of $8,000 for 2024, you are ‘out of the donut hole’ again, because now the ‘Catastrophic Coverage’ applies to you. From this point on, you again just have to pay co-insurance or co-payment for the rest of the year.
Is there help for persons who can’t afford to pay for their medication while in the ‘donut hole’?
Yes, if your income is low enough to be eligible for specific programs:
- Apply for a prescription assistance program. Ask your pharmacist about programs that some drug manufacturers offer as part of the Partnership for Prescription Assistance (or you can call 888-477-2669). Note: These assistance programs are only available for those with qualifying low income.
- There are free programs that offer prescription discount cards. While some are free, others may have eligibility requirements or enrollment fees. Those programs can save you a lot of money, depending on your prescription drug needs.
- Use generic drugs when available. Purchasing generics and utilizing the cards mentioned above could keep you from ever falling into the Medicare Part D coverage gap. Also, always make sure to buy your prescription drugs from a pharmacy that is part of your plan’s network.
- Contact your Social Security office to find out if you might be eligible for any programs that give additional help if your drug costs are higher than average.
