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Medicare Part D’s ‘Doughnut Hole’ is anything but sweet

January 18, 2011
Lehigh Acres Citizen


Medicare recipients who fall into the "doughnut hole" received some welcome news on Jan. 1 when Medicare began providing a 50-percent discount for name-brand prescription drugs for those who will exceed their drug plan's initial coverage limit in 2011.

The Medicare Part D coverage gap, known as the "doughnut hole," is the difference between the initial coverage limit of $2,840 per year for prescription drugs and the catastrophic coverage threshold of $4,550.

Once you fall into the "doughnut hole," your Part D prescription drug coverage, or drug coverage under a Medicare Advantage plan, stops. You'll pay the full cost of your prescriptions until you reach the "catastrophic" coverage level of $4,550.

But starting this year, the 50-percent discount on name-brand prescription drugs is available for anyone who falls into Medicare Part D's dreaded doughnut hole or coverage gap. A 7-percent discount is available for generic medications.

The discount will benefit older Floridians who are getting hit hard by prescription drug costs specifically, those whose total retail prescription costs average $237 per month or less ($2,840 per year). Note that some prescription drug plans offer lower or higher initial overage limits instead of the standard $2,840.

For older Americans who take several prescription drugs, the doughnut hole has been anything but sweet it costs them several thousand dollars per year out of pocket. To add insult to injury, Medicare beneficiaries enrolled in Part D prescription drug plans find that they must continue paying Part D plan premiums even after they fall into the doughnut hole.

The U.S. Department of Health and Human Services estimates that more than a quarter of Part D participants stop following their prescribed regimen of drugs when they hit the doughnut hole.

Under the new national health law, discounts for both name-brand and generic drugs will be larger next year and grow steadily until 2020, when the Part D doughnut hole disappears entirely. People who now pay 100 percent of their drug costs in the doughnut hole will instead pay a copayment or co-insurance fee of no more than 25 percent.

In the meantime, if you are trying to figure out if -- and when -- you might fall into the Part D coverage gap, you will find AARP's "doughnut hole" calculator at to be a useful tool. AARP's online calculator tool also can help you figure out how to save on prescription drug costs with lower-cost medications such as generics.

Doug Heinlen, of Sarasota, is AARP's Florida state president. -Ed.



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