The Medicare Part D coverage gap is one of the most puzzling parts of the Medicare program itself. Some users wonder why they would invent such a challenging and confusing system, while others think it is a good idea. However, in practice the idea helps to mitigate costs and make the program available to more people. Luckily the gap is set to disappear in 2020 as long as the Affordable Care Act can stay in effect.
What is the Donut Hole Exactly?
How the donut hole works is that once your coverage plan has spent a certain amount of money, the coverage goes down and you have to pay more out of your own pocket. However, if you hit the other side of that hole, the coverage goes way up to 95%. At first, you must pay the full cost of all prescriptions up to $405 dollars. After you have done that, you will have 75% coinsurance from your Medicare Part D Plan, until you have spent $2,700. Then you will have to pay anywhere from 36-44% of the cost of your prescription drugs until you have paid $5000 out of your own pocket. At that point you will only have to pay a measly 5% of the cost of your drugs. It’s just that donut hole that you have to get out of before the big coverage kicks in.
Can Anything Be Done About the Medicare Part D Donut Hole?
When you are in the donut hole, as it is called, it might seem like a big drag. However, there are some Medicare Part D plans that do offer a bit of relief. If you get one of these plans, you will note that it might alleviate the costs by offering greater coverage for generic prescriptions over brand names, but if you have “gap coverage” insurance then you will definitely be paying more per month. The good news is that the most you will pay for your prescriptions out of pocket before only having to pay the tiny 5% amount is only $5,000. For most people this is a small portion of their yearly income. If you are low income, there are programs that will help you to cover this gap so it doesn’t become a hardship for you.
Good News for the Donut Hole
Well, the Affordable Care Act, AKA Obamacare, takes into account this coverage gap/donut hole. It makes sure that by 2020, if the act stays in effect, that the donut hole will be completely gone. That means that starting in 2020 you will only ever have to pay the 25% coinsurance on your prescriptions. Once you reach your limit, you will then go to the 5% payment option. So, good news is on the horizon for everyone who is worried about the donut hole. However, there are many politicians who want to remove or amend Obamacare so you will have to keep checking back here to find out the latest news about Medicare Part D.