During this time of year, many people will begin to enter the Coverage Gap or “Donut Hole” portion of their Medicare Part D coverage and find their coverage costs changing.
If you have already purchased medications with a retail value of $4,020 you are in the 2020 Donut Hole.
Question: I have purchased medications worth $3,930 so far this year, my next brand-name drug purchase has a retail cost of $400, bringing me into the Donut Hole (or Coverage Gap). Will I get a Donut Hole discount on the full $400 retail price or just the $90 that falls into the gap?
Your Donut Hole discount (which is 25%) only applies to the $90 portion of the retail drug price that falls into the Coverage Gap. Since your purchase “straddles” two phases of coverage, you pay your cost-sharing for the Initial Coverage phase (for example, $47 for a Tier 3 brand drug) and the brand-name Donut Hole discount applies to the remainder of the retail price falling into the Donut Hole.
Therefore, your total drug cost is the cost-sharing you paid in the Initial Coverage phase plus the discounted cost in Donut Hole. (Note: The combined cost of the Initial Coverage phase and the Donut Hole phase will never exceed your drugs total retail cost.)
Question: If I use only one brand drug that costs $347 and have a $47 co-pay, will I enter the 2020 Donut Hole?
Yes. If your retail drug costs average $347 you will exceed your Medicare plan’s Initial Coverage Limit of $4,020 and enter the 2020 Coverage Gap or Donut Hole sometime in November.
Only your plan’s retail drug costs count toward entering the Donut Hole. Your co-pay has no impact on entering the Donut Hole, but will impact when you exit the Donut Hole.
Question: I am in the Donut Hole and now have a new prescription that is not on my plan’s list of covered drugs. Do I get a discount on my new medication and will my costs count toward getting out of the Donut Hole?
No. Only Medicare Part D prescription medications found on your plan’s formulary receive the 75% discount. Non-formulary medications and medications excluded from the Medicare Part D program, do not qualify for the Donut Hole discount and your non-formulary drug purchases do not count toward meeting your 2020 total out-of-pocket drug spending (TrOOP) limit of $6,350 — the amount you need to spend to exit the Donut Hole.
If you are using a non-formulary medication, you can ask your Medicare plan for a Formulary Exception which is a type of Coverage Determination.
If your Medicare Part D plan denies your request, you have the right to appeal your plan’s decision. For more information, you can click here to read about Formulary Exceptions. https://www.cms.gov/Medicare/Appeals-and-Grievances/MedPrescriptDrugApplGriev/Exceptions.html
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