Medicare Doughnut Hole - What Is It?

I know a husband and wife who both signed up for the same Medicare Part D prescription plan after thoroughly investigating which plan was best for them. They chose a plan with a lower monthly premium which covered all the drugs they routinely take. They understood how their Medicare D plan would work but interestingly it's working differently for them because they take different medications.

The wife already hit the initial coverage limit of $2250 (the wife spent $663 out-of-pocket and the plan paid $1587) and she has landed in the Medicare doughnut hole (gap in coverage). The wife does not come out of the Medicare doughnut hole until her total out-of-pocket expense equals $3600 (she must pay another $2937 out-of-pocket). After reaching $3600 out-of-pocket she will be covered under catastrophic protection of her Medicare Part D prescription plan.

The husband has not yet reached the initial coverage limit of $2250 (the husband has spent $404 out-of-pocket and the plan paid $1463 for a total drug cost of $1867). Once he does hit $2250 he will also go into the Medicare doughnut hole and have to pay the full discounted price for his drugs. It is unlikely the husband will come out of the Medicare doughnut hole by the end of the year.

Why the difference? The wife takes some more expensive, brand name medications which increased her out-of-pocket costs. The husband has more generic drugs which reduced his out-of-pocket costs comparatively. Every Medicare Part D enrollee needs to know about the Medicare doughnut hole and how it will impact their annual prescription costs. Learn the details from Medicare Doughnut Hole - What Is It?

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