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The Medicare Coverage Gap is the stage of your Part D benefit when there is a gap in prescription drug coverage. During this stage, you will have to pay a larger portion of your drug costs, until you reach the Catastrophic Stage. Most Medicare drug plans have a coverage gap or doughnut hole. In 2013, you reach the coverage gap when your total drug costs (what you and your plan pay) reach $2,970. You exit the gap and enter the Catastrophic Stage when your total out-of-pocket costs, which include the annual deductible and copayments/coinsurance) reach $4,750.
Each state offers at least one plan that provides partial or full coverage during the coverage gap. For example, some plans may not have a gap at all, while others may offer generic drug coverage in the gap. Plans with gap coverage often charge a higher monthly premium, so you should only consider one of these plans if you have high drug costs and know you will reach the coverage gap. You can use our free Plan Comparison Tool to see which plans provide some type of coverage in the donut hole.
Beneficiaries with the following conditions or drug classes most frequently reach the coverage gap:
- Oral Anti-Diabetics
- Proton Pump Inhibitors
- Angiotensin Receptor Blockers
- ACE Inhibitors
How does Healthcare Reform affect the coverage gap?
Under the 2010 Affordable Care Act, Medicare is gradually closing the doughnut hole in the following ways:
- Gave a $250 rebate to all Part D enrollees who entered the donut hole in 2010.
- Provided discounts on brand-name drugs and generic drugs in the donut hole beginning in 2011. In 2013, there is a 52.5 percent discount on brands and 21 percent discount on generics.
- Phasing in additional discounts for brand-name and generic drugs to close the doughnut hole completely by 2020. (For example, in 2014 there will be a 28 percent discount on generics.)
How can I delay reaching the coverage gap?
There are a number of things you can do to lower your drug costs all year long and delay reaching the gap:
- Talk to your doctor about using lower-cost generics that are right for you.
- Find out if any of your local pharmacies offer your drugs at a reduced cost.
- Buy your long-term medications (medications that you take for 3 months or more) from your plan's mail-order pharmacy. Mail-order pharmacies typically provide a 3-month supply of drugs for about the same copay amount as a two-month supply at retail pharmacies.
- Always use a preferred pharmacy if your plan has both preferred and non-preferred pharmacies in its network. Your copayments will be lower if you fill your covered prescriptions at a preferred pharmacy.
- Always use your Medicare drug plan card. When you use your drug plan card, you get discounted rates on the drugs you buy, and your costs apply toward your deductible.
- Look for programs that offer assistance. For example, the National Patient Advocate Foundation or the National Organization for Rare Disorders may have programs that can help with your drug costs. Comprehensive information on federal, state, and private assistance programs in your area is available at www.benefitscheckup.org.
If you do reach the Coverage Gap, you can keep your drug costs down by using lower-cost generic drugs whenever possible or using your plan's mail-order pharmacy for long-term medications. If you reach the Coverage Gap at the end of the year, and know that you will not have enough drug costs to qualify for catastrophic coverage, you may also want to consider using a discount drug card.