2015 Donut Hole discount example for a $250 brand name medication purchase

Question: I use a brand name drug that usually costs $250 and has no generic. What will I pay for this medication once I reach the Donut Hole or the Catastrophic Coverage portion of my 2015 Medicare plan?

Remember that once the total retail value of your Medicare Part D drugs exceeds $2,960, you will reach your Medicare plan's 2015 Initial Coverage Limit and enter the 2015 Donut Hole or Coverage Gap. In the Donut Hole, you will pay 55% drug discount, pay $112.50, and get 95% of the retail price or $237.50 credited toward meeting your $4,700 out of pocket limit.

If you exceed the $4,700 out of pocket limit, you will reach the Catastrophic Coverage portion of your Medicare Part D plan and pay the higher of $6.60 or 5% of the retail drug price. In our example, if you reach the Catastrophic Coverage portion of your Medicare Part D plan, you will pay $12.50 for a $250 medication.

Reminder: You can use our this site Drug Finder ( on this site) to see the average retail cost of any medication covered by your Medicare prescription drug plan. But remember that actual negotiated retail drug prices can vary plan-to-plan, pharmacy-to-pharmacy, and week-to-week.

Here is another example:

When you purchase a formulary medication with a $100 retail cost in 2015
Retail Cost	You Pay	Medicare Plan Pays	Pharma Mfgr Pays	Gov. pays	Amount toward your TrOOP
Initial Deductible	$100	$100	$0	$0	$0	$100
Initial Coverage Phase *	$100	$25	$75	$0	$0	$25
Coverage Gap - brand-name **	$100	$45	$5	$50	$0	$95
Coverage Gap - generic ***	$100	$65	$35	$0	$0	$65
Catastrophic Coverage ****	$100	$5	$0	$0	$95	$5

* 25% coinsurance
** 55% Discount
*** 35% Discount
**** approx. 5% of retail