The Part D Doughnut Hole Explained

When one turns age 65 they are presented with the confusion that is Medicare.  Many questions arise such as how to apply for benefits, when to apply for benefits, what Medicare  (Part A, Part B) should I choose and what about prescription drug benefits.  Over the years working with our senior clients we have discovered the most confusing aspect of Medicare is understanding the doughnut hole.  The purpose of this blog is to communicate what the doughnut hole is and how to navigate the doughnut hole.

The doughnut hole was established in 2003 with the passing of the Medicare Modernization Act.  The plan was first implemented in 2006.  It defined a standard benefit for prescription drug coverage (Part D) that includes a gap in coverage as a way of limiting federal spending.  When one falls into this doughnut hole they are responsible for the full cost of prescription drugs plus they must continue paying for their Part D premiums.  The doughnut hole means that nearly 4 million beneficiaries with significant drug cost must pay a greater cost of their prescription drug cost.

To best navigate the doughnut hole, you need to make sure you select the Part D prescription drug card that best meets your needs.  For 2017 the coverage gap or doughnut hole begins once you reach your Medicare Part D plan’s initial coverage limit of $3700 and ends when you spend a total of $4950.  The amount you pay may vary based on the prescription drug plan you elect.  If you go www.medicare.gov and click “Drug Coverage Part D” you will be guided through a process that will list, the available prescription drug plans available in your area.  I have found this process to be very user friendly and helpful but you do need to take the time to review.

The doughnut hole is scheduled to close in 2020.  When it closes, a great financial burden will have been removed.  Until it closes we recommend you closely review the prescription drug alternatives available to you.  We suggest you seek the services of an independent insurance broker to help you in doing this.  We would greatly appreciate the opportunity to serve you in this manner.  The Medigap Pro has developed a reputation for superior service and expertise in all things related to Medicare.  Please do not hesitate to contact us at www.medigappro.com or 1-800-535-8016

Ted Guy, The Medigap Pro