What will I pay for my $250 brand-name drug when I reach the Donut Hole and Catastrophic Coverage phases of my 2017 Medicare Part D drug plan?
Archive: The Donut Hole or Coverage Gap · published Jul 31, 2017
Once the total retail value of your Medicare Part D drug purchases exceeds your Initial Coverage Limit of $3,700, you will enter the 2017 Donut Hole or Coverage Gap and pay 40% of the retail price for your brand-name medications – assuming that your Medicare prescription drug plan does not provide any coverage in the Donut Hole.
However, you will get a credit of 90% of the retail cost ($225) toward meeting your annual total out-of-pocket limit (TrOOP) of $4,950.
If you exceed the $4,950 out-of-pocket limit, you will reach the 2017 Catastrophic Coverage phase of your Medicare Part D plan and pay the higher of $8.25 or 5% of the brand-name retail drug price.
So if you reach the Catastrophic Coverage portion of your Medicare Part D plan, you will pay $12.50 ($250 x 0.05) for a $250 brand-name medication (since $12.50 is greater than the $8.25 minimum).
As a reminder: You can use our Drug Finder ( on this site) to see the average retail cost of any medication covered by your Medicare prescription drug plan. But remember, your actual negotiated retail drug prices can vary pharmacy-to-pharmacy and even week-to-week at the same pharmacy.