Archive: If I am in the Donut Hole and buy a $100 formulary drug with the Gap Discount Program paying $75, does the $100 retail cost count towards my total out-of-pocket expenses?

Archive: Exiting the Donut Hole · updated Jul 12, 2023

Not exactly - the amount credited toward TrOOP depends on whether you have purchased a brand-name or generic drug while in the Donut Hole.If you are in the Donut Hole or Coverage Gap and you purchase a formulary brand-name medication that has a retail price of $100, you will pay $25 and the 75% Donut Hole Discount will cover $75.

With the purchase of a brand-name drug, you get 95% of the $100 retail drug cost credited toward your total drug spend or TrOOP (total out-of-pocket costs) -- the $25 you spent plus the $70 portion of the 75% discount paid by the pharmaceutical manufacter. The remaining $5 of the 75% discount is covered by your Medicare Part D plan and is not credited toward your TrOOP.

If your medication is a generic drug, your Donut Hole discount is still 75% (you pay 25%) but only the $25 you spent is credited toward your TrOOP threshold. The $75 discount or 75% generic Donut Hole discount paid by your Medicare Part D plan is NOT counted toward your total drug spending or TrOOP.

You click here to see how the Donut Hole discount has increased over time.