Making Part D work
Most Prescription Drug Plans have a coverage gap called a donut hole. This means there’s a temporary limit on what the drug plan will cover for drugs. The coverage gap begins after you and your drug plan have spent a certain amount for covered drugs. For 2016, you’re in the coverage gap once you and your plan have spent $3,310 on covered drugs. People with Medicare who get Extra Help paying Part D costs won’t enter the coverage gap.
Once you reach the coverage gap in 2015, you’ll pay 45% of the plan’s cost for covered brand-name prescription drugs. You get these savings if you buy your prescriptions at a pharmacy or order them through the mail. The discount will come off of the price that your planshas set with the pharmacy for that specific drug.
Although you’ll only pay 45% of the price for the brand-name drug in 2016, 95% of the price will count as out-of-pocket costs which will help you get out of the coverage gap.
In 2015, you’ll pay 58% of the price for generic drugs during the coverage gap. What you pay for generic drugs during the coverage gap will decrease each year until it reaches 25% in 2020. The coverage for generic drugs works differently from the discount for brand-name drugs. For generic drugs, only the amount you pay will count toward getting you out of the coverage gap.