The medications must be drugs covered under the Medicare Part D program and included on your Medicare Part D plan’s formulary or drug list. The discount for Donut Hole drug purchases can change each year until 2020 when all medications purchased in the Donut Hole will cost 25% of the negotiated retail cost - and the Donut Hole will be considered "closed". For instance,
In 2018, you receive a 65% discount on Brand-name drugs (you pay 35%) - and get 85% of the total retail cost credited toward meeting your total out-of-pocket limit (TrOOP) or Donut Hole exit point. Plus, you will receive a 56% discount on Generic drugs (you pay 44% of the retail cost) and the discounted amount you actually pay will also count toward TrOOP.
Please see the charts below for future discounts on generic and brand-name drugs purchased in the Donut Hole.
Again, please note, that the Doughnut Hole discount is not available to anyone receiving financial Extra Help (the Low-Income Subsidy). Also the discount is only for Medicare Part D drugs included on your Medicare Part D prescription drug plan formulary.
Generic Drugs: The Generic drug discount will increase each year until the plan year 2020 when the co-insurance for generics in the Coverage Gap will be 25%. The following table shows how the annual Generic drug discount increases:
| Plan Year | Beneficiary Cost-Sharing (you pay) |
Medicare Part D plan Cost-Sharing |
| 2011 | 93% | 7% |
| 2012 | 86% | 14% |
| 2013 | 79% | 21% |
| 2014 | 72% | 28% |
| 2015 | 65% | 35% |
| 2016 | 58% | 42% |
| 2017 | 51% | 49% |
| 2018 | 44% | 56% |
| 2019 | 37% | 63% |
| 2020 | 25% | 75% |
Brand-Name Drugs: The Brand-Name drug discount operates differently from the Generic drug discount - but the Brand-Name drug discount will also be reduced to co-insurance of 25% by 2019 (instead of 2020).
Update 02/12/18: President Trump signed the Bipartisan Budget Act of 2018 (Pub.L. 115-123) on Friday, February 9, 2018 that effectively "closes" the Coverage Gap for brand-name drugs, with the brand-name Donut Hole discount increasing to 75% in 2019.
A key feature to the new law is that, starting in 2019, the pharmaceutical industry will be responsible for 70% of the cost of medications in the Coverage Gap, therefore you will receive credit for 95% of the retail drug cost toward meeting your 2019 total out-of-pocket maximum or Donut Hole exit point (the 25% of retail costs you pay plus the 70% drug manufacturer discount).
As a note, since the brand-name drug manufacturer will take on an additional 20% of the retail cost, the Medicare Part D plan's responsibility will decrease to 5% (from the originally planned 20% in 2019 and 25% in 2020 and beyond), the Medicare beneficiaries portion will decrease to 25% (from the original planned 30% in 2019).
| Plan Year | Beneficiary Cost-Sharing (you pay) |
Medicare Part D plan Cost-Sharing |
Drug Manufacturer Cost-Sharing |
| 2011 | 50% | 0% | 50% |
| 2012 | 50% | 0% | 50% |
| 2013 | 47.5% | 2.5% | 50% |
| 2014 | 47.5% | 2.5% | 50% |
| 2015 | 45% | 5% | 50% |
| 2016 | 45% | 5% | 50% |
| 2017 | 40% | 10% | 50% |
| 2018 | 35% | 15% | 50% |
| 2019 | 25% | 5% | 70% |
|
2020 |
25% | 5% | 70% |
Looking for more information? Related questions can be found here:
- If
I reach the Coverage Gap and get a Donut Hole Discount on my brand-name
drugs purchases, do I still get full retail credit toward meeting my
Donut Hole exit point?
- What
do I pay when the purchase of my medications moves me from my regular
coverage into the Donut Hole? Do I get coverage from my plan or do I
receive the Donut Hole Discount?