As you move from your Initial Coverage Phase
and into the Coverage Gap
, your savings on a formulary drug -- or extra cost in the Donut Hole or Coverage Gap will depend on your Medicare Part D plan’s initial coverage phase cost-sharing (what you are paying before entering
the Donut Hole) --- and your plan's negotiated retail drug cost
Example #1 You pay more for your formulary drugs when you enter the Donut Hole - even with the 75% Donut Hole discount.
In this first example, we will assume your Tier 3 preferred brand-name medication (AZOPT ® 1% EYE DROPS (10.000 ML ) (NDC: 00065027510)
) has a negotiated retail cost around $340
and your Medicare Part D plan has a $43
co-pay for this drug during your Initial Coverage Phase
Based on these number you would find that you will pay more
for your medication when you enter the Donut Hole - even with the 75% Donut Hole discount
Based on this example, you pay $43
for this medication in the Initial Coverage Phase (before entering the Coverage Gap) and you would pay around $85 (75% of $340)
for the same formulary drug when you are in the Donut Hole
. (We calculate this number because you will receive a 75% Donut Hole discount
on all formulary drugs – so you pay 25% of your Medicare plan's negotiated retail drug cost or
$85 (25% of $340) - and this means your Donut Hole cost is more than
the cost of your initial $43 co-payment
Where can I see the details of the different cost for my drugs throughout my Medicare Part D drug coverage?
When using our Drug Finder (Q1Rx.com
), you can choose your drug (enter the drug name or 11-digit NDC
), click on the co-pay amount ($43
), and then view the details of the drug cost in different phases of your Medicare Part D plan where you can see higher drug cost-sharing in the Donut Hole (or "Gap") - event though you are receiving a 75% brand-name drug discount.
Example #2 You save money on formulary drugs when you enter the Donut Hole with the 75% Donut Hole discount.
As another example, if your Tier 4 non-preferred drug’s retail cost
, with 35% co-insurance your coverage cost would be $15.20
(you pay 35% of your plan's $43.20 retail drug price) during the Initial Coverage Phase.
Since this is a generic formulary medication (AMANTADINE is the generic for Symmetrel ® ) you will receive a 75% generic drug discount
and pay only $10.80
for the generic while in the Donut Hole (25% of
the $43.20 retail cost) - that is, you pay less than
while in the Donut Hole for this formulary drug as compared to your plan’s initial $15.12 co-insurance
(Please note: In the graphic above, you can also see other examples of how your retail drug cost can compare to your cost-sharing, such as the $63 retail drug cost with a $7
co-pay (and costing twice as much or $15.75 for the same drug while in the Donut Hole - 25% of $63)).
Looking for more cost-sharing details?
If you click on the 35%
cost-sharing value, you can see in the Q1Rx Drug Finder chart that the Donut Hole discount is calculated
for both generic drugs and brand-name drugs (although the values are the same with both receiving a 75% discount) ($10.80
) and this can be compared to the full retail drug cost during the initial deductible phase ($43.20
) and the cost-sharing during the Initial Coverage Phase ($15.12
) - again, showing a savings when (or if) you enter the Donut Hole.
When your Medicare Part D plan treats Generic formulary drugs like Brand-name drugs
Please note that, as this example highlights, generic drugs are not always organized on a generic or lower formulary drug tier such as Tier 1 or Tier 2 (in this case, the generic is a Tier 4 Non-Preferred Drug). In addition, you may find brand-name drugs on a generic drug tier. However, you still will receive the 75% Donut Hole discount in 2020 and beyond for all formulary drugs, no matter where the drug is placed within your plan's formulary.
The Bottom Line: Plan ahead for potentially higher drug costs when you reach the Donut Hole or Coverage Gap.
Even when the Donut Hole "closed"
in 2020 with a 75% discount on both brand-name and generic drugs - you may find that your out-of-pocket drug costs increase
when you enter the Donut Hole - so if you are currently paying less than 25% of the retail price for your drugs (such as a $10 co-pay for a $100 drug), you may wish to begin budgeting for potential cost increases as you begin to approach the Coverage Gap phase of your Medicare Part D plan (where you would then pay $25 for the same $100 formulary drug when in the Gap).