January 5, 2022
2 minute read

The Medicare Part D Donut Hole: What It Is & How to Prepare For It

Medicare Part D, also known as a Prescription Drug Plan (PDP), helps people with Medicare pay for their medication. These plans are purchased from private health insurance providers and come with a variety of benefits and premiums. But for some high-usage Medicare enrollees, they can also come with unexpected expenses, called the Medicare Part D donut hole.

What Is the Medicare Part D Donut Hole?

The Medicare Part D donut hole is a temporary coverage gap that could make you pay more for your prescription drugs than you might have expected. Not all people on Medicare reach the donut hole. You first need to spend a set amount in expenses. If you do reach the coverage gap, you are responsible for paying 25% of your covered prescription drug costs out of pocket until you reach a set maximum limit.1

The Medicare Part D donut hole works like this:

  1. You pay your Part D monthly premiums throughout your plan’s coverage year.
  2. Before you reach your deductible, you pay all of the cost of your prescription drugs.
  3. Once you’ve reached your deductible, you’ll only pay a copay or coinsurance for your covered prescription drug costs, leaving the remaining amount for your Part D plan to pay. This is until you’ve reached the coverage limit ($4,430 in 2022).1
  4. Once the coverage limit has been reached, you will hit the Medicare donut hole. During this time, you will be responsible for no more than 25% of your covered prescription drug costs until you hit the yearly out-of-pocket maximum limit ($7,050 in 2022).2
  5. When you exceed the yearly out-of-pocket maximum, you will receive what’s called “catastrophic coverage.” This means that you may get your prescription drugs completely covered or at a smaller cost for the remainder of the year.

 

What Costs Count Toward the Medicare Part D Donut Hole?

The expenses that count toward the Medicare donut hole can include:

  • Copayments
  • Coinsurance
  • Yearly deductible
  • Brand-name prescription drug discounts you receive while in the Medicare Part D donut hole
  • The amount you pay in the Medicare Part D donut hole

The expenses that don’t count toward the Medicare Part D donut hole can include:

  • Your plan’s monthly premium
  • The pharmacy dispensing fee
  • The cost of prescription drugs that aren’t covered under your drug plan’s formulary

How to Shop for a Medicare Part D Plan

If you’re ready to apply for a Medicare Part D plan, here are some tips to consider:

  1. Make a list of your current medications.
  2. Review the details of your current coverage to better compare a new plan.
  3. Determine if you’d like to order your prescriptions by mail.
  4. Check the plan network to see if your current pharmacy is included.
  5. Review the premium, annual deductible, and out-of-pocket maximum limit of any Medicare Part D plan you’re considering.

HealthMarkets Makes Finding a Part D Plan Easy

Concerned about how the Medicare Part D donut hole will affect your budget? Choosing a plan that best meets your needs could help keep costs in check. HealthMarkets can help you compare coverage options and view plan details to find the Part D coverage that’s right for you. Start shopping for Part D plans online today, or call (800) 827-9990 to speak with a licensed insurance agent.

footer logo
facebook logo
better business bureau seal

© 2022 HealthMarkets Insurance Agency. All rights reserved.

To send a complaint to Medicare, call 1-800-MEDICARE (TTY users should call 1- 877-486-2048), 24 hours a day/7 days a week). If your complaint involves a broker or agent, be sure to include the name of the person when filing your grievance.

We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE (TTY users should call 1- 844-704-7357), 24 hours a day/7 days a week, to get information on all of your options.

Attention: This website is operated by HealthMarkets Insurance Agency, Inc. and is not the Health Insurance Marketplace® website. HealthMarkets Insurance Agency, Inc. is licensed as an insurance agency in all 50 states and DC. Not all agents are licensed to sell all products. Service and product availability varies by state. Sales agents may be compensated based on a consumer’s enrollment in an insurance plan. No obligation to enroll. Agent cannot provide tax or legal advice. Contact your tax or legal professional to discuss details regarding your individual business circumstances. Our quoting tool is provided for your information only. All quotes are estimates and are not final until consumer is enrolled. Medicare has neither reviewed nor endorsed this information.

HealthMarkets Insurance Agency offers the opportunity to enroll in either QHPs or off-Marketplace coverage. Please visit HealthCare.gov for information on the benefits of enrolling in a QHP. Off-Marketplace coverage is not eligible for the cost savings offered for coverage through the Marketplaces.

This information is not a complete description of benefits. Call the Plan’s customer service phone number for more information.

48262-HM-0122

© 2022 HealthMarkets Insurance Agency. All rights reserved.

To send a complaint to Medicare, call 1-800-MEDICARE (TTY users should call 1- 877-486-2048), 24 hours a day/7 days a week). If your complaint involves a broker or agent, be sure to include the name of the person when filing your grievance.

We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE (TTY users should call 1- 844-704-7357), 24 hours a day/7 days a week, to get information on all of your options.

Attention: This website is operated by HealthMarkets Insurance Agency, Inc. and is not the Health Insurance Marketplace® website. HealthMarkets Insurance Agency, Inc. is licensed as an insurance agency in all 50 states and DC. Not all agents are licensed to sell all products. Service and product availability varies by state. Sales agents may be compensated based on a consumer’s enrollment in an insurance plan. No obligation to enroll. Agent cannot provide tax or legal advice. Contact your tax or legal professional to discuss details regarding your individual business circumstances. Our quoting tool is provided for your information only. All quotes are estimates and are not final until consumer is enrolled. Medicare has neither reviewed nor endorsed this information.

HealthMarkets Insurance Agency offers the opportunity to enroll in either QHPs or off-Marketplace coverage. Please visit HealthCare.gov for information on the benefits of enrolling in a QHP. Off-Marketplace coverage is not eligible for the cost savings offered for coverage through the Marketplaces.

This information is not a complete description of benefits. Call the Plan’s customer service phone number for more information.

48262-HM-0122

© 2022 HealthMarkets Insurance Agency. All rights reserved.

To send a complaint to Medicare, call 1-800-MEDICARE (TTY users should call 1- 877-486-2048), 24 hours a day/7 days a week). If your complaint involves a broker or agent, be sure to include the name of the person when filing your grievance.

We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE (TTY users should call 1- 844-704-7357), 24 hours a day/7 days a week, to get information on all of your options.

Attention: This website is operated by HealthMarkets Insurance Agency, Inc. and is not the Health Insurance Marketplace® website. HealthMarkets Insurance Agency, Inc. is licensed as an insurance agency in all 50 states and DC. Not all agents are licensed to sell all products. Service and product availability varies by state. Sales agents may be compensated based on a consumer’s enrollment in an insurance plan. No obligation to enroll. Agent cannot provide tax or legal advice. Contact your tax or legal professional to discuss details regarding your individual business circumstances. Our quoting tool is provided for your information only. All quotes are estimates and are not final until consumer is enrolled. Medicare has neither reviewed nor endorsed this information.

HealthMarkets Insurance Agency offers the opportunity to enroll in either QHPs or off-Marketplace coverage. Please visit HealthCare.gov for information on the benefits of enrolling in a QHP. Off-Marketplace coverage is not eligible for the cost savings offered for coverage through the Marketplaces.

This information is not a complete description of benefits. Call the Plan’s customer service phone number for more information.

48262-HM-0122