Question:  I have purchased drugs with a $3,000 retail value and my next drug purchase will cost $400, bringing me into the Coverage Gap, so will I get a Donut Hole discount on the full $400 or just the $90 that falls into the gap?

You will get a Donut Hole discount for the $90 portion that falls into the 2016 Coverage Gap.

Plus, you will actually pay a portion of the drug cost for coverage in the Initial Coverage Phase and coverage in the Donut Hole or Coverage Gap.

When you cross between two "phases" of your Medicare Part D plan coverage, you have a "Straddle Claim" (the purchase straddles two areas of coverage) and your cost is split between the two phases.

The first portion of your purchase will fall in your Initial Coverage Phase until you have met the $3,310 limit for 2016 (or whatever your Medicare plan provides). So you will pay a co-payment or co-insurance for the first $310 of the $400 retail cost - depending on your plan design (for example, a $60 Tier 3 co-pay or 25% co-insurance).

Then the remaining balance of the retail price ($90) will receive the brand-name Donut Hole discount of 55% (you pay 45% of the remaining retail price) or the Donut Hole discount for generics of 42% (you pay 58% of the remaining retail price) - depending on the type of medication you are purchasing.

The good news is, even with Straddle Claims, you always will have a savings over the retail drug cost.

The math (with assumptions):

Part 1 - Initial Coverage Phase:  Assuming you have a $60 co-pay for the remaining $310 portion of your brand-name drug's $400 retail cost that falls into the Initial Coverage Phase.  Your cost Part 1: $60.00 +

Part 2 - Coverage Gap Phase:  You will receive a 55% brand-name Donut Hole discount for the remaining $90 portion of your brand-name drug's $400 retail cost that falls into the Coverage Gap. Your cost Part 2: $40.50

Total cost estimate: $100.50 for a $400 brand-name drug