If you are in the 2014 Donut Hole, 97.5% of your brand-name drug's retail cost counts toward exiting the Donut Hole.
As is true since 2011, if you exceed your Medicare Part D prescription drug plan's Initial Coverage Limit ($2,850 in 2014)
and enter the Donut Hole portion of your Medicare plan, you will
receive a discount on the retail prices of your brand-name and generic drug
purchases.
Generic drug purchases receive a 28% Donut Hole discount in 2014 and your discounted generic drug price counts toward meeting your 2014 true out-of-pocket threshold (TrOOP or total drug spend) of $4,550. So if you purchase a generic medication with a retail value of $100 while in the 2014 Donut Hole, you will receive a 28% discount and pay $72. The $72 will then count toward meeting your 2014 TrOOP threshold of $4,550.
However, brand-name drug purchases actually get a larger discount and more of the drug's retail cost counts toward meeting your TrOOP.
Brand-name drug purchases receive a 52.5% Donut Hole discount in 2014 and 97.5% of the brand-name drug price counts toward meeting your true
out-of-pocket threshold (TrOOP)
of $4,550. (In general, with the brand-name Donut Hole discount, you will receive credit for the 50% brand-name drug
manufacturer discount plus the portion of the prescription drug’s retail
price you paid (47.5% in 2014) - but, you do not get credit toward TrOOP for the portion of the drug cost paid
by your Medicare plan.)
So if you buy a brand-name medication with a $100 retail cost
while in the 2014 Donut Hole, you pay $47.50 and get $97.50 toward
exiting the Donut Hole or meeting the $4,550 out-of-pocket treshold.Again, the additional 2.5% of the “discount” is paid by your Medicare Part D plan and therefore does NOT count toward exiting the Donut Hole or reaching your out-of-pocket costs (TrOOP).
You can read more about the Donut Hole Discount in our FAQs or in our on this site News.