Is the Medicare Part D Donut Hole any different if I am enrolled in a Medicare Advantage plan that includes drug coverage?

No. If your Medicare Advantage plan includes prescription drug coverage (MAPD), then the Donut Hole or Coverage Gap portion of your coverage works just like a stand-alone Medicare Part D prescription drug plan (or PDP).

(1) You will enter the Donut Hole based on the total negotiated retail value of your medication purchases. For eample, when the total retail cost of your 2020 drug purchases exceeds the standard Initial Coverage Limit of $4,020 ($3,820 in 2019), you will leave your Medicare plan's Initial Coverage Phase (where you share the cost of your prescriptions with your Medicare plan) and enter into the Donut Hole.

(2) You will then exit the Donut Hole based on your total out-of-pocket spending (or TrOOP) limit. For example, in 2020, the TrOOP limit or Donut Hole exit point is reached after your actual out-of-pocket spending for covered medications has reached $6,350.

Remember, while you are in the Donut Hole, 70% of the brand-name drug discount that is paid by the drug manufacturers counts toward meeting this total out-of-pocket spending amount.

Here is how this works: If you are in your Medicare Advantage plan's Initial Coverage Phase (before reaching the Donut Hole), and you purchase a medication with a $100 retail cost, and pay your Medicare plan's co-payment (for example, $30) out of your own pocket, and the Medicare plan pays the other $70, you get $30 credit toward the $6,350 Donut Hole exit point and $100 toward your $4,020 Initial Coverage Limit.

When you exceed the Initial Coverage Limit of $4,020, enter the 2020 Donut Hole, and you buy the same $100 medication, and your Medicare plan does not provide any additional Donut Hole coverage, you will get a 75% Donut Hole discount on all brand-name drugs bought in the Donut Hole (you pay 25% of retail), or a 75% discount on generic drugs purchased in the Donut Hole (again, you pay 25% of retail).

Going back to our previous example, if your $100 medication was a brand-name drug, then you will pay only $25 (25% of $100) in the Donut Hole - but, you will get credit for $95 toward meeting your $6,350 out-of-pocket threshold or Donut Hole exit point. This $95 credit represents the $25 that you paid for the formulary drug and the $70 that was paid on your behalf by the brand-name drug (pharmaceutical) manufacturer. You do not get credit for the $5 portion of the retail cost paid toward the brand-name discount by your Medicare plan.

If you purchase a generic drug in the Donut Hole with a $100 retail value, you will get the 75% generic Donut Hole discount, pay $25- and the $25you spent will count toward meeting your $6,350 TrOOP limit or 2020 Donut Hole exit point.

As another reminder: Your Medicare Advantage plan (MAPD) has two maximum limits - one limit for Medicare Part A and Medicare Part B spending (MOOP) and one limit for drug spending (TrOOP):

(1) Your Medicare Advantage plan's MOOP - or maximum out-of-pocket limit establishes the maximum amount you will pay in a year for your in-network Medicare Part A and Medicare Part B coverage (with some possible plan exceptions). A Medicare Advantage plan can change the plan's MOOP limit each year, but in 2020, the MOOP limit cannot be over $6,700 (for in-network care).

(2) Your total out-of-pocket limit (TrOOP) for your Medicare Part D prescription drug purchases. When you exceed the 2020 TrOOP limit of $6,350, you enter the Catastrophic Coverage portion of your Medicare prescription drug coverage and pay a significantly reduced amount for your medications (for example, for brand-name medications purchased in the Catastrophic Coverage phase, you will pay the greater of 5% of the retail cost or $8.95).