Maybe.  As you move from your Initial Coverage Phase and into the Coverage Gap, your savings on a formulary drug -- or extra cost in the Donut Hole or Coverage Gap will depend on your Medicare Part D plan’s initial coverage phase cost-sharing (what you are paying before entering the Donut Hole) -- and your plan's negotiated retail drug cost.

Note about the Donut Hole closing:
Although we say that the Donut Hole "closed" in 2020 since you receive a 75% discount on all formulary drugs purchased in the Donut Hole, the Coverage Gap still remains the third phase of your Medicare Part D coverage.

So you will leave your Medicare Part D plan's Second Phase or Initial Coverage Phase once your retail drug costs exceed the Initial Coverage Limit and enter the Coverage Gap (Donut Hole) where the cost of your formulary medications can actually increase, decrease, or stay the same.

Example #1
You pay more for your formulary drugs when you enter the Donut Hole - even with the 75% Donut Hole discount.

In this first example, we will assume your Tier 3 preferred brand-name medication (AZOPT ® 1% EYE DROPS (10.000 ML ) (NDC: 00065027510)) has a negotiated retail cost around $340 and your Medicare Part D plan has a $43 co-pay for this drug during your Initial Coverage Phase.

Based on these number you would find that you will pay more for your medication when you enter the Donut Hole - even with the 75% Donut Hole discount.

Based on this example, you pay $43 for this medication in the Initial Coverage Phase (before entering the Coverage Gap) and you would pay around $85 (75% of $340) for the same formulary drug when you are in the Donut Hole. 

(We calculate this number because you will receive a 75% Donut Hole discount on all formulary drugs – so you pay 25% of your Medicare plan's negotiated retail drug cost or $85 (25% of $340) - and this means your Donut Hole cost is more than the cost of your initial $43 co-payment.)

Question: Where can I see the details of the different cost for my drugs throughout my Medicare Part D drug coverage?

When using our Drug Finder (Q1Rx.com), you can choose your drug (enter the drug name or 11-digit NDC), click on the co-pay amount ($43), and then view the details of the drug cost in different phases of your Medicare Part D plan where you can see higher drug cost-sharing in the Donut Hole (or "Gap") - event though you are receiving a 75% brand-name drug discount.

Example #2
You save money on formulary drugs when you enter the Donut Hole with the 75% Donut Hole discount.

As another example, if your Tier 4 non-preferred drug’s retail cost is $43.20, with 35% co-insurance your coverage cost would be $15.20 (you pay 35% of your plan's $43.20 retail drug price) during the Initial Coverage Phase.

Since this is a generic formulary medication (AMANTADINE is the generic for Symmetrel ® ), you will receive a 75% generic drug discount and pay only $10.80 for the generic while in the Donut Hole (25% of the $43.20 retail cost) - that is, you pay less than while in the Donut Hole for this formulary drug as compared to your plan’s initial $15.12 co-insurance.

(Please note:  In the graphic above, you can also see other examples of how your retail drug cost can compare to your cost-sharing, such as the $63 retail drug cost with a $7 co-pay (and costing twice as much or $15.75 for the same drug while in the Donut Hole - 25% of $63)).

Looking for more cost-sharing details?

If you click on the 35% cost-sharing value, you can see in the Q1Rx Drug Finder chart that the Donut Hole discount is calculated for both generic drugs and brand-name drugs (although the values are the same with both receiving a 75% discount) ($10.80) and this can be compared to the full retail drug cost during the initial deductible phase ($43.20) and the cost-sharing during the Initial Coverage Phase ($15.12) - again, showing a savings when (or if) you enter the Donut Hole.

When your Medicare Part D plan treats Generic formulary drugs like Brand-name drugs

Important:  Please note that, as this example highlights, generic drugs are not always organized on a generic or lower formulary drug tier such as Tier 1 or Tier 2 (in this case, the generic is a Tier 4 Non-Preferred Drug).

In addition, you may find brand-name drugs on a generic drug tier.  However, you still will receive the 75% Donut Hole discount in 2020 and beyond for all formulary drugs, no matter where the drug is placed within your plan's formulary.

The Bottom Line:  Plan ahead for potentially higher drug costs when you reach the Donut Hole or Coverage Gap.

Even when the Donut Hole "closed" in 2020 with a 75% discount on both brand-name and generic drugs - you may find that your out-of-pocket drug costs increase when you enter the Donut Hole - so if you are currently paying less than 25% of the retail price for your drugs (such as a $10 co-pay for a $100 drug), you may wish to begin budgeting for potential cost increases as you begin to approach the Coverage Gap phase of your Medicare Part D plan (where you would then pay $25 for the same $100 formulary drug when in the Gap).