Archive: Can I avoid the Donut Hole if I buy a 90-day supply of my medications with the lower copayment?
Archive: Entering the Donut Hole · updated Apr 20, 2024
Example of single-month purchase: Enter the Donut Hole in March
As a first example, if your monthly retail drug costs are $1,800 and your plan's Initial Coverage Limit is $5,030 in 2024), you will enter the Donut Hole in the third month -- so March ($5,030 / $1,800 = 2.79 months).
Example of multiple-month purchase: Enter the Donut Hole in mid-January
But, if you purchase a 3-month supply of your medications even if you have a copayment of only 2-months, your retail drug costs will remain at the 3-month value for purposes of calculating the start of your Donut Hole ($1,600 x 3 = $5,400).
In this example, since you exceeded your Initial Coverage Limit of $5,030 during the first month by buying a 3-month supply, you will be in the Donut Hole in mid-January - rather than March. You will remain in the Donut Hole until you exceed your total out-of-pocket spending (the TrOOP threshold $8,000 in 2024.
Bottom Line: Your medication purchasing habits do affect when you go into the Donut Hole.
If you purchase all of your medications early in the year - you will have a higher total retail cost earlier in the year - and probably enter the Donut Hole earlier.
Important Fact: 2024 is the last year that the Donut Hole will exist.
In 2025 one of the provisions of the Inflation Reduction Act (IRA) of 2022 is the elimination of the Coverage Gap (Donut Hole). Medicare Part D beneficiaries will stay in the Initial Coverage phase until they reach the maximum cap on out-of-pocket spending for Part D formulary drugs - RxMOOP - which is set at $2,000 for 2025. After reaching RxMOOP Medicare Part D beneficiaries will have a $0 copay for all formulary drugs.