Most plans with Medicare prescription drug coverage (Part D) have a coverage gap, dubbed the “doughnut hole.” This means that after you and your plan have spent a certain dollar amount on covered medications, you have to pay remaining prescription costs out-of-pocket up to a yearly limit. Once you have reached the yearly limit, your coverage gap ends and your drug plan helps pay for covered drugs again.
What the donut hole has meant for some Americans in the past, though, was choosing between their high prescription drug costs and other vital expenses such as groceries.
But through provisions of the Affordable Care Act, Medicare Part D users whose prescription drug costs reach the doughnut hole each year receive discounts on name-brand and generic prescriptions. These discounts will grow until the doughnut hole closes in 2020. By then, you will only pay 25 percent of the costs of your drugs until you reach the annual out-of-pocket spending limit. As long as you are on a prescription drug plan, you will receive continuous Medicare Part D coverage for your prescription drugs.