The
2018 Donut Hole discount will increase to 65% of retail cost for all brand-name medications purchased in the Donut Hole (you pay 35% of the retail cost and receive 85% credit toward TrOOP) and the 2018 generic Donut Hole discount will increase to 56% of retail costs (you pay 44% of the retail cost for generic drugs).
The 56% 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 65% brand-name drug discount is split into two parts:
-
The first portion, is a 50% discount paid by the drug manufacturer as it has been since 2011.
- The additional 15% discount in 2018 is considered Medicare Part D plan coverage and is paid by your 2018 Medicare Part D prescription drug plan. Since this additional 15% brand-name drug discount is paid by your plan and considered plan coverage, the 15% does not count toward getting out of the Donut Hole or meeting your TrOOP.
Therefore, 50% of the brand-name discount – that portion paid by the manufacturer, will continue to count toward your TrOOP along with the 35% of the retail price that you will pay.
Here is an example of a drug purchase in the Donut Hole: In 2018, if you buy a brand-name drug that has a retail price of $100, you will pay $35 (a 65% discount). For this Donut Hole purchase, $85 will count toward getting out of the 2018 Donut Hole (or meeting your
2018 TrOOP limit of $5,000 ) – the $35 you paid
plus the $50 brand-name drug discount paid by the drug manufacturer. As noted above, the extra $15 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 2018 Donut Hole, you would pay $44 (receiving a 56% discount) and only the $44 you paid would count toward your 2018 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 2018 Donut Hole in our article:
Understanding the 2018 Medicare Part D Coverage Gap or Donut Hole