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The 2019 Donut Hole Discount increases (... and what this means to you)

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The 2019 Donut Hole Discount increases (... and what this means to you)
Published on 2018-12-24 22:18:02
Category: Donut Hole Discounts

The 2019 Donut Hole discount will increase to 75% of retail cost for all brand-name medications purchased in the Donut Hole (you pay 25% of the retail cost and receive 95% credit toward TrOOP). This means that the Donut Hole for brand-name drugs will be considered "closed" since you will not pay more than the CMS standard 25% co-insurance for your Coverage Gap brand-name drug purchases.

The 2019 generic Donut Hole discount will increase to 63% of retail costs (you pay 37% of the retail cost for generic drugs).  The 63% generic drug Donut Hole discount is paid by your Medicare Part D plan and does not count toward your True Out-of-Pocket costs (TrOOP) or Donut Hole exit point.

The 75% brand-name drug discount is split into two parts:
  • The first portion, is a 70% discount paid by the brand-name drug manufacturer (an increase from the 50% that the brand-name drug manufacturer has been paid since 2011). 
  • The additional 5% discount in 2019 is considered Medicare Part D plan coverage and is paid by your 2019 Medicare Part D prescription drug plan. Since this additional 5% brand-name drug discount is paid by your plan and considered plan coverage, the 5% does not count toward getting out of the Donut Hole or meeting your TrOOP.
Therefore, the 70% of the brand-name discount – the portion paid by the manufacturer, along with the 25% of the retail price that you pay, will both continue to count toward your TrOOP.


Here is an example of a drug purchase in the Donut Hole:  In 2019, if you buy a brand-name drug that has a retail price of $100, you will pay $25 (a 75% discount).  For this Donut Hole purchase, $95 will count toward getting out of the 2019 Donut Hole (or meeting your 2019 TrOOP limit of $5,100 ) – the $25 you paid plus the $70 brand-name drug discount paid by the drug manufacturer.  As noted above, the extra $5 portion of the discount will not count toward TrOOP because it was paid by your Medicare Part D plan and is considered plan coverage. 

However, if you purchased a $100 generic medication while in the 2019 Donut Hole, you would pay $37 (receiving a 63% discount) and only the $37 you paid would count toward your 2019 TrOOP or Donut Hole exit point.

The Donut Hole discount and Non-Formulary Drugs
If you are using a drug not covered by your Medicare Part D plan, then you will not receive the Donut Hole discount since the medication is not covered by your Medicare plan – and you should speak with your Medicare Part D plan’s Member Services department about getting a “formulary exception” for the non-formulary drug so that you will receive coverage (the toll-free number for Member Services is on your Member ID card).

Extra Help and the Donut Hole Discount
If you are eligible for the Medicare Part D Extra Help program or Low-Income Subsidy, then you will not have a “Donut Hole” in your coverage and your drug costs will not change until reaching Catastrophic Coverage where you will probably pay even less (you can read more about Catastrophic Coverage here https://Q1FAQ.com/715.html ).

You can also read more about the 2019 Donut Hole in our article:
Understanding the 2019 Medicare Part D Coverage Gap or Donut Hole

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