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Will I enter the 2019 Medicare Part D Coverage Gap or Donut Hole?


If the average retail cost of your formulary medications is over $319 each month, you will enter the Donut Hole or Coverage Gap sometime during the 2019 plan year.

As a reminder, you will enter your Medicare Part D prescription drug plan's Donut Hole or Coverage Gap if the total retail value of your formulary prescription purchases exceeds your plan's Initial Coverage Limit -- and the 2019 standard Initial Coverage Limit is: $3,820.

For example, if you use only one brand name, Tier 3 formulary medication that has a retail cost of $375 and you pay only a $47 co-pay with your Medicare Part D plan, your Medicare plan will pay the remaining $328 ($375 - $47), but the total retail cost of $375 counts toward meeting your $3,820 Initial Coverage Limit and entering the Donut Hole.  So if your average monthly retail drug costs are $375, you will enter the 2019 Donut Hole or Coverage Gap in November - and your coverage cost will increase to $94 per month (based on the 25% Donut Hole discount).  See our chart below to estimate when you enter the Donut Hole based on your retail drug costs.

How does "Retail Drug Cost" Compare to "Your Actual "out-of-pocket" Drug Cost"

Your retail drug cost of your medications is not what you actually spend out-of-pocket for your prescriptions.  Instead, retail cost is what you spend - plus what your Medicare Part D plan pays (or others pay on your behalf). 

Using the example above, your plan's negotiated retail price is $375, but your actual out-of-pocket drug cost is a $47 co-pay.

And your Medicare plan's monthly Explanation of Benefits (EOB) letter will not state "Retail Drug Cost", but instead, your EOB will show two different columns with: "Plan Paid" and "You Paid" - when these two columns are added together, the sum is your Medicare drug plan's negotiated retail drug cost.

When your Cost-Sharing is more than your plan's Negotiated Retail Price

If the retail price of your formulary medication is less than your co-payment, you will pay the retail price and not the higher co-payment - based on the "lesser of" rule (you always pay the lesser of the retail cost or co-pay).

For example, if you are purchasing a Tier 3 medication with a $40 retail cost and the co-pay is $47, you will pay the $40 retail cost - and not the higher $47 co-pay - you never pay more than your Medicare plan's negotiated retail drug price.)

Where else can you see retail drug price information?

Both our Formulary Browser (showing all drugs for a single Medicare plan) and our Drug Finder (showing all Medicare plans covering a single drug) include CMS formulary data and average retail pricing information.

For more information, our Retail Drug Pricing Detail pages show the pricing history for each medication (when available).  As noted, our retail drug pricing information is the average price across all pharmacies in a specific region and actual retail drug costs can vary slightly at your specific pharmacy.  You can also telephone your Medicare plan or a Medicare representative (1-800-Medicare) for retail drug price information.

Entering the 2019 Donut Hole as compared to the 2018 Donut Hole

The good news:  If retail costs of your prescription have not changed since 2018 (which is unlikely), the 2019 Donut Hole or Coverage Gap should start just slightly later since the 2019 Initial Coverage Limit ($3,820) is slightly higher than the 2018 Initial Coverage Limit of $3,750.

In other words, you will be able to purchase slightly more prescriptions before entering the 2019 Donut Hole as compared to 2018.

For example, if your average monthly retail medication costs were $400 in 2016, you entered the 2016 Donut Hole in early-September 2016.  However, if your costs remained the same the next year, you entered the 2017 Donut Hole sometime in early-October 2017.  Based on the same $400 average monthly retail drug cost, you entered the 2018 Donut Hole mid-October and you would enter the 2019 Donut Hole late-October.

And more good news: No Donut Hole for Medicare beneficiaries with Extra Help

If you receive Medicare Part D Extra Help or Low-Income Subsidy (LIS), then you will never enter the 2019 Donut Hole and the cost of your prescriptions will remain constant until you reach the Catastrophic Coverage portion of your Medicare Part D plan where your drug costs may actually be reduced depending on your financial resources

And if you are qualified for your state's Medicaid program, you are automatically qualified for Extra Help.

If you are purchasing Medicare Part D drugs with a retail cost of over $319 per month, when will you enter the 2019 Donut Hole or Coverage Gap?

The chart below shows the average retail drug costs that would cause you to enter the Coverage Gap or Donut Hole for any given month.

Minimum Average Monthly Retail Drug Cost
Causing You to Enter the Donut Hole in a Given Month

 You will enter
the Donut Hole in . . .
If your 2019
monthly retail drug
costs are over . . .
If your 2018
monthly retail drug
costs are over . . .
If your 2017
monthly retail drug
costs are over . . .
If your 2016
monthly retail drug
costs are over . . .
January $3,820 $3,750 $3,700 $3,310
February $1,910 $1,875 $1,850 $1,655
March $1,274 $1,250 $1,234 $1,104
April $955 $938 $925 $828
May $764 $750 $740 $662
June $637 $625 $617 $552
July $546 $536 $529 $473
August $478 $469 $463 $414
September $425 $417 $412 $368
October $382 $375 $370 $331
November $348 $341 $337 $301
December $319 $313 $309 $276

And here is how these numbers would look in a chart . . .

When you will enter the Donut Hole? 2019, 2018, 2017, and 2016 chart

Bottom line: If the retail cost of your medications averages over $319 each month and you are not eligible for Extra Help, you will enter the Donut Hole some time during 2019.

Entering the Donut Hole and the 2019 Donut Hole Discount

If you are entering the 2019 Donut Hole, you will pay 25% of retail for brand drugs and 37% of retail for generic drugs.  For more information, please also see our article: 
"The 2019 Donut Hole Discount increases (... and what this means to you)"

Using our earlier example, if you are using a brand-name drug with a retail cost of $375, and you enter the Donut Hole, you would receive the brand name Donut Hole discount and pay 25% of retail or $94 (and so yes, even though considered "closed", coverage in the Donut Hole is costing you more than your $47 co-pay from your Initial Coverage Phase).

Estimating your Medicare Part D plan spending with our Donut Hole Calculator

You can also use our 2019 Donut Hole Calculator or PDP-Planner to get an idea of how you can budget for 2019 drug costs.
The following link is for an example of a person with retail brand-name drug costs totaling $800 per month: https://q1medicare.com/PartD-PartDCoverageGapCalculator2019.php? pgtype=ex1 (as noted below, you can adjust the example and drug mix to estimate your actual out-of-pocket costs).

(Spoiler Alert: If your average retail drug cost are $800 per month, and you use only brand-name drugs, you enter the 2019 Donut Hole in May, exit into Catastrophic Coverage in October, and have out-of-pocket drug costs of around $2,363 per year.)

Details of Medicare Part D Donut Hole Calculator Example 1

If you wish, you can change the $800 value in our example to your own prescription spending - change the deductible (which is set at $0 by default) - and choose your mix of generic or brand-name drugs) to see a preview of your own 2019 Medicare Part D drug coverage.

Still not sure what all these numbers mean to you?  Click here and let us know.

 







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