When I am in my 2012 Medicare Part D plan's Donut Hole or Coverage Gap, how much do I actually pay? I have already reached my 2012 Medicare Part D prescription drug plan's initial coverage limit of $2930. So what do I pay?
Archive: The Donut Hole or Coverage Gap · published May 13, 2012
Unfortunately, we do not have a standard answer for this question - but, you probably will pay at least $1,863.75 and possibly slightly more than $3,727.50 while in the 2012 Donut Hole.
In general, you will exit the 2012 Donut Hole when your total annual out of pocket costs (TrOOP or total drug spend) reaches $4,700 - less any brand-name drug discounts you receive while in the Donut Hole. (The $4,700 TrOOP limit does not including your monthly Medicare Part D plan premiums.)
However, what you actually have yet to pay before you exit the 2012 Donut Hole depends on (1) what you paid during your plan's intial deductible (if any) and (2) what you paid during the initial coverage phase (cost-sharing phase) and (3) your medication purchases in the Donut Hole (for instance, the amount of generic medications and brand-name medications you purchase while in the2012 Donut Hole).
As an example, if your Medicare Part D plan exactly follows the 2012 Medicare Defined Standard Benefit Plan ( on this site), you could plan to spend about $3,727.50 while you are in the 2012 Donut Hole - less the 50% discount you receive on any brand-name drug purchases while in the Donut Hole. (Please remember that the Donut Hole discount can change each year up to 2020).
So, following the Medicare Defined Standard Benefit plans example, your total out of pocket spending would include:
(1) Your $320 deductible (if your 2012 plan has a deductible),
(2) What you paid in cost-sharing during the initial coverage phase (so not the $2,930 initial coverage limit, but only what you actually paid of the $2,930, and not including what your plan paid). In our example, we are expecting a 25% co-insurance price on all purchases up to a total negotiated retail value of $2,930 (less the $320 initial deductible) or $652.50. (Co-Insurance is when you pay a flat 25% for the cost of you medications instead of a co-payment for drugs in different formulary tiers.)
(3) What you paid for generic and brand-name drugs in the coverage gap AND the 50% discount on brand-name drugs that was paid on your behalf by the drug manufacturer during the coverage gap. The total maximum amount you could spend in the Donut Hole is $3,727.50 - if you only purchased generic medications. If you only purchased brand-name medications while in the Donut Hole, you would receive a 50% discount, but receive 100% credit for the purchase. So you would spend a minimum of $1,863.75 on brand-name drugs in the Donut Hole.
So again, the answer to the question will actually depend on the type of medication that you purchase while in the Donut Hole and what you have personally spent on prescription medications before reaching the Donut Hole.
Using our "simple" example that follows the Medicare Defined Standard Benefit, you could spend between $1,863.75 and $3,727.50 while in the Donut Hole - for a total out of pocket cost (or TrOOP) range of between $2,836.25 and $4,700 before exiting the 2012 Donut Hole and entering the Catastrophic Coverage Portion of your 2012 Medicare Part D plan.
Please remember that these example values will change depending on whether you have an iniital deductible and whether you plan has a co-payment system for cost-sharing (and not 25% co-insurance).
And now, here is the good news: You do not have to keep track of this information yourself.
Your monthly Explanation of Benefits letter (or EOB) will tell you how much more you need to spend before you enter the next phase of your Medicare Part D coverage (this can be found in EOB SECTION 2: Which "drug payment stage" are you in? (read more on this site).
EOB SECTION 3: Your "out-of-pocket costs" and "total drug costs" will detail these two figures. When the "out-of-pocket costs" reaches $4,700, you will enter the catastrophic coverage phase.
You can read more about the EOB on this site.