Starting back in 2011, the co-insurance (or cost-sharing) of generic and brand-name medications purchased while in the Coverage Gap (or Donut Hole / Doughnut Hole) was reduced or "discounted" for non-Low-Income Subsidy (non-LIS) Medicare beneficiaries.
The medications must be drugs covered under the Medicare Part D program and included on your Medicare Part D plan’s formulary or drug list. The discount for Donut Hole drug purchases can change each year until 2020 when all medications purchased in the Donut Hole will cost 25% of the negotiated retail cost - and the Donut Hole will be considered "closed". For instance,
In 2018, you receive a 65% discount on Brand-name drugs (you pay 35%) - and get 85% of the total retail cost credited toward meeting your total out-of-pocket limit (TrOOP) or Donut Hole exit point. Plus, you will receive a 56% discount on Generic drugs (you pay 44% of the retail cost) and the discounted amount you actually pay will also count toward TrOOP.
Please see the charts below for future discounts on generic and brand-name drugs purchased in the Donut Hole.
Again, please note, that the Doughnut Hole discount is
not available to anyone receiving financial Extra Help (the Low-Income Subsidy). Also the discount is
only for Medicare Part D drugs included on your Medicare Part D prescription drug plan formulary.
Generic Drugs: The
Generic drug discount will increase each year until the plan year 2020 when the co-insurance for generics in the Coverage Gap will be 25%. The following table shows how the annual Generic drug discount increases:
Plan Year |
Beneficiary Cost-Sharing
(you pay)
|
Medicare Part D
plan Cost-Sharing |
2011 |
93% |
7% |
2012 |
86% |
14% |
2013 |
79% |
21% |
2014 |
72% |
28% |
2015 |
65% |
35% |
2016 |
58% |
42% |
2017 |
51% |
49% |
2018 |
44% |
56% |
2019 |
37% |
63% |
2020 |
25% |
75% |
Brand-Name Drugs: The Brand-Name drug discount operates differently from the Generic drug discount - but the Brand-Name drug discount will also be reduced to co-insurance of 25% by 2019 (instead of 2020).
Update 02/12/18:
President
Trump signed the Bipartisan Budget Act of 2018 (
Pub.L. 115-123) on Friday, February 9, 2018
that effectively "closes" the Coverage Gap for brand-name drugs, with the brand-name Donut
Hole discount increasing to 75% in 2019.
A key feature to the new law is that, starting in 2019, the
pharmaceutical industry will be responsible for 70% of the cost of
medications in the Coverage Gap, therefore you will receive credit
for 95% of the retail drug cost toward meeting your 2019 total
out-of-pocket maximum or Donut Hole exit point (the 25% of retail
costs you
pay
plus the 70% drug manufacturer discount).
As a
note, since the brand-name drug manufacturer will take on an additional
20% of the retail cost, the Medicare Part D plan's responsibility will
decrease to 5% (from the originally planned 20% in 2019 and 25% in 2020
and beyond), the Medicare beneficiaries portion will decrease to 25%
(from the original planned 30% in 2019).
Plan Year |
Beneficiary Cost-Sharing
(you pay)
|
Medicare Part D
plan Cost-Sharing |
Drug Manufacturer
Cost-Sharing |
2011 |
50% |
0% |
50% |
2012 |
50% |
0% |
50% |
2013 |
47.5% |
2.5% |
50% |
2014 |
47.5% |
2.5% |
50% |
2015 |
45% |
5% |
50% |
2016 |
45% |
5% |
50% |
2017 |
40% |
10% |
50% |
2018 |
35% |
15% |
50% |
2019 |
25% |
5% |
70% |
2020
and beyond
|
25% |
5% |
70% |
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