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Will my drug cost increase when I enter the Donut Hole?


Maybe.  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.

Note about the Donut Hole closing - Although we say that the Donut Hole "closed" in 2020 since you receive a 75% discount on all formulary drugs purchased in the Donut Hole, the Coverage Gap still remains the third phase of your Medicare Part D coverage.  So you will leave your Medicare Part D plan's Second Phase or Initial Coverage Phase once your retail drug costs exceed the Initial Coverage Limit and enter the Coverage Gap (Donut Hole) where the cost of your formulary medications can actually increase, decrease, or stay the same.

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.)


Question: 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.

Q1Rx Drug Finder showing cost-sharing details through the phases of Part D plan coverage


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 is $43.20, 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.

Q1Rx Drug Finder showing retail cost and co-pays for formulary drug

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.

Q1Rx Drug Finder showing cost-sharing details through the phases of Part D plan coverage

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).







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Tips & Disclaimers
  • The Medicare Advantage and Medicare Part D prescription drug plan data on our site comes directly from Medicare and is subject to change.
  • Medicare has neither reviewed nor endorsed the information on our site.
  • We provide our Q1Medicare.com site for educational purposes and strive to present unbiased and accurate information. However, Q1Medicare is not intended as a substitute for your lawyer, doctor, healthcare provider, financial advisor, or pharmacist. For more information on your Medicare coverage, please be sure to seek legal, medical, pharmaceutical, or financial advice from a licensed professional or telephone Medicare at 1-800-633-4227.
  • We are an independent education, research, and technology company. We are not affiliated with any Medicare plan, plan carrier, healthcare provider, or insurance company. We are not compensated for Medicare plan enrollments. We do not sell leads or share your personal information.
  • Benefits, formulary, pharmacy network, provider network, premium and/or co-payments/co-insurance may change on January 1 of each year. Our PDP-Compare.com and MA-Compare.com provide highlights of annual plan benefit changes.
  • The benefit information provided is a brief summary, not a complete description of benefits. For more information contact the plan.
  • Limitations, copayments, and restrictions may apply.
  • We make every effort to show all available Medicare Part D or Medicare Advantage plans in your service area. However, since our data is provided by Medicare, it is possible that this may not be a complete listing of plans available in your service area. For a complete listing please contact 1-800-MEDICARE (TTY users should call 1-877-486-2048), 24 hours a day/7 days a week or consult www.medicare.gov.
  • When enrolling in a Medicare Advantage plan, you must continue to pay your Medicare Part B premium.
  • Medicare beneficiaries with higher incomes may be required to pay both a Medicare Part B and Medicare Part D Income Related Monthly Adjustment Amount (IRMAA). Read more on IRMAA.
  • Medicare Advantage plans that include prescription drug coverage (MAPDs) are considered Medicare Part D plans and members with higher incomes may be subject to the Medicare Part D Income Related Monthly Adjustment Amount (IRMAA), just as members in stand-alone Part D plans. In certain situations, you can appeal IRMAA.
  • You must be enrolled in both Medicare Part A and Part B to enroll in a Medicare Advantage plan. Members may enroll in a Medicare Advantage plan only during specific times of the year. Contact the Medicare plan for more information.
  • If you are enrolled in a Medicare plan with Part D prescription drug coverage, you may be eligible for financial Extra Help to assist with the payment of your prescription drug premiums and drug purchases. To see if you qualify for Extra Help, call: 1-800-MEDICARE (1-800-633-4227). TTY users should call 1-877-486-2048, 24 hours a day/ 7 days a week or consult www.medicare.gov; the Social Security Office at 1-800-772-1213 between 7 a.m. and 7 p.m., Monday through Friday. TTY users should call, 1-800-325-0778; or your state Medicaid Office.
  • Medicare evaluates plans based on a 5-Star rating system. Star Ratings are calculated each year and may change from one year to the next.
  • A Medicare Advantage Private Fee-for-Service plan (PFFS) is not a Medicare supplement plan. Providers who do not contract with the plan are not required to see you except in an emergency.
  • Disclaimer for Institutional Special Needs Plan (SNP): This plan is available to anyone with Medicare who meets the Skilled Nursing Facility (SNF) level of care and resides in a nursing home.
  • Disclaimer for Dual Eligible (Medicare/Medicaid) Special Needs Plan (SNP): This plan is available to anyone who has both Medical Assistance from the State and Medicare. Premiums, co-pays, co-insurance, and deductibles may vary based on the level of Extra Help you receive. Please contact the plan for further details.
  • Disclaimer for Chronic Condition Special Needs Plan (SNP): This plan is available to anyone with Medicare who has been diagnosed with the plan specific Chronic Condition.
  • Medicare MSA Plans combine a high deductible Medicare Advantage Plan and a trust or custodial savings account (as defined and/or approved by the IRS). The plan deposits money from Medicare into the account. You can use this money to pay for your health care costs, but only Medicare-covered expenses count toward your deductible. The amount deposited is usually less than your deductible amount, so you generally have to pay out-of-pocket before your coverage begins.
  • Medicare MSA Plans do not cover prescription drugs. If you join a Medicare MSA Plan, you can also join any separate (stand-alone) Medicare Part D prescription drug plan
  • There are additional restrictions to join an MSA plan, and enrollment is generally for a full calendar year unless you meet certain exceptions. Those who disenroll during the calendar year will owe a portion of the account deposit back to the plan. Contact the plan provider for additional information.
  • Medicare beneficiaries may enroll through the CMS Medicare Online Enrollment Center located at www.medicare.gov.
  • Medicare beneficiaries can file a complaint with the Centers for Medicare & Medicaid Services by calling 1-800-MEDICARE 24 hours a day/7 days or using the medicare.gov site. Beneficiaries can appoint a representative by submitting CMS Form-1696.