Archive: Will the Coverage Gap discount program affect which brand-name drugs are offered under Medicare Part D?

It is possible. The Affordable Care Act limits Medicare Part D coverage for applicable drugs to only those drug manufacturers that have an agreement with the Centers for Medicare and Medicaid Services (CMS) to participate and pay discounts under the Doughnut Hole discount program.

Because applicable drugs that are not covered under a manufacturer agreement cannot be covered under Part D, Part D plans can NOT cover any such drugs under formulary exceptions (coverage determinations), emergency first fill, or transition policies, unless Medicare has authorized this coverage.

Medicare can authorize coverage for a drug not covered under a manufacturer discount agreement if Medicare determines that the availability of the drug is essential to the health of Part D enrollees.

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.