Anyone who has had prescription drug coverage with their Medicare is familiar with the term "donut hole". This term refers to a gap in prescription drug coverage under Part D.
The coverage gap begins after you and your drug plan spent a certain amount for covered drugs. In 2020, you're in the coverage gap once you and your plan have spent $4,020. Once you reach the coverage gap, you will be liable for no more than 25% of the cost of brand-name and generic prescriptions covered under your plan.
Items that count towards the coverage gap
- Your yearlydeductible, coinsurance, and copayments
- The discount you get on brand-name drugs in the coverage gap
- What you pay in the coverage gap
Items that don't count towards the coverage gap
- The drug planpremium
- Pharmacy dispensing fee
- What you pay for drugs that aren’t covered
Some have heard that the donut hole is going away in 2020. In fact, the donut hole will not immediately disappear. It will gradually narrow until it completely closes in 2020.However, even after the coverage gap is gone, everyone on Part D will still have the same level of cost sharing — about 25 percent — from the time you meet your deductible until the time you reach catastrophic coverage. Catastrophic coverage remains in place even after the coverage gap goes away.