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What Is A Coverage Gap In Medicare

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What Is Gap Coverage

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Gap coverage is insurance that covers more than the standard amount of your medications. This type of coverage isnt available in all areas.

The coverage gap isnt going to affect everyone. Youre most likely to enter the gap if you have a lot of medications or if you have several high-cost medications like brand-name or specialty tier drugs.

To reach the gap you and your drug policy must spend a specific amount of money on covered drugs. When both you and your insurance company spend $4,430 on covered drugs, youre in the coverage gap.

Original Medicare Coverage Gaps

One of the coverage gaps in Original Medicare is prescription drug coverage. Many people donât realize that Medicare Part A and Part B donât cover most prescription medications you take at home.

Medicare Part A usually covers medications you get while an inpatient in a hospital or skilled nursing facility setting. Medicare Part B may offer limited outpatient coverage for some prescription drugs you normally get at a doctorâs office .

You might have to pay all other prescription drug costs unless youâre enrolled in Medicare Part D or have other insurance.

Original Medicare also doesnât generally cover costs like:

  • Routine vision care, such as eye exams, glasses, or contacts
  • Routine dental services, including oral exams, cleanings, dentures, and fillings
  • Routine foot care
  • Routine hearing care, including hearing aids
  • Nursing home care
  • Health coverage if youâre out of the country

Is There Any Insurance That Covers The Donut Hole

There is no insurance that provides coverage exclusively for the Part D donut hole.

Medicare beneficiaries may be able to help themselves avoid the donut hole by choosing less expensive generic drugs over brand-name drugs when possible, shopping for prescription drug discounts, buying drugs in bulk through mail-order services and utilizing Medicare Extra Help .

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How Does The Medicare Donut Hole Work And When Does It End

So when exactly does the donut hole begin and end for 2022? The short answer is, that varies depending on the Part D plan you choose and how much you spend on prescription medications. Some people pay less for their medications when they enter the donut hole while others pay more.

Here are more facts about the Medicare donut hole.

How To Know If I Qualify For The Medicare Coverage Gap Discount Program

the donut hole medicare part d buffer benefits 1

To understand the discount program, it is best to speak with a licensed agent. Our licensed agents are experts in all things Medicare. We will be able to answer all your questions on the first interaction, clearing any confusion you may have.

To contact a Medicare expert, you can simply call the number at the top of the page. Cant talk now? Complete our online rate form and we will reach out to you. We are available six days a week to help you get on the right track with your Medicare coverage.

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Coverage Gap Discount Program

Since the Coverage Gap Discount Program began on January 1, 2011, CMS has been analyzing Prescription Drug Event data to understand how many discounts have been provided in the coverage gap and for which classes of prescription drugs. We have created four documents illustrating our findings. Under Downloads, the link titled Coverage Gap Discount Data Spreadsheet contains three documents. The first document shows the total number of beneficiaries receiving a gap discount, the total gap discount amount, the average gap discount amount by beneficiary, and the count of PDEs with a gap discount. The second document shows the year-to-date coverage gap discount data by zip code with the city name, county name, and state included. The third document shows the year-to-date coverage gap discount data by county code with the state and county names included. The final document Total Coverage Gap Discount Amount by Drug Therapeutic Use under Downloads is a pie chart showing the total coverage gap discount amount by drug therapeutic use.

What Youll Pay For Your Meds

Not everyone will enter the coverage gap it doesnt apply to members who get Extra Help to pay for their covered medications.¹

This year, most people with Medicare Part D benefits will enter the coverage gap once theyve spent $4,130 on covered medications.² When this happens, your Humana drug plan will let you know via your monthly explanation of benefits statement.

Please be aware, if you have a select , you may have an increased coverage gap limit. This means you may be able to spend more on your covered medications before entering the coverage gap. You can review your Evidence of Coverage document to confirm your plan design details.

What you pay for your medications could vary from the initial coverage stage and the coverage gap stage. This is because your Humana drug plan may charge a lower copayment or coinsurance in the initial stage, instead of 25% of the drugs total cost in the coverage gap stage. And if you have a group Medicare drug plan, your out-of-pocket costs may vary from the chart above. To learn more about your costs while in the coverage gap, review your Humana drug plan details.

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What Is The Medicare Coverage Gap

The coverage gap is also known as the donut hole for Part D prescriptions. Most Medicare plans have a coverage gap, but sometimes in select areas, there are plans available that cover more than the standard amount. If you find a plan that includes gap coverage, its likely to have a higher monthly premium.

Medicare Coverage Gap 5 Benefit Periods

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Medicare tracks your hospital or skilled nursing facility with benefit periods. A benefit period begins with your admission to the in-patient facility. The benefit period continues until 60 days past discharge. After you stay out of the facility for 60 days, a new benefit period begins. For each new benefit period, you pay for another deductible. There is no limited to the number of benefit periods you receive.

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Reducing Costs In The Coverage Gap

Since Medicare tallies the total cost of your medications toward the Medicare donut hole, you should know the full cost of each drug you are taking. Fortunately, this is easy to do by reviewing your statements from the insurance company.

For other tips on how to lower your out-of-pocket expenses on Part D, see our blog post about that topic: How to Reduce Costs in the Part D Coverage Gap.

All insurance agents at Boomer Benefits train extensively to carefully analyze your potential drug spending when you are brand new to Medicare and setting up your Part D coverage for the first time.

We then provide ongoing information and instructions with how to use Medicares Plan Finder to shop your Part D plan each fall. This exclusive help is limited to our Medigap and Medicare Advantage policyholders ONLY.

Worried about the coverage gap? Ask for free help from our agency with Part D when you have purchased your Medicare Supplement through us.

What Happens If My Prescription Drug Isnt Covered

Medicare mandates that there be at least two drugs from every therapeutic class in a formulary. But in some instances, you may need a drug that just doesnt make the list. If that happens, your doctor can contact the insurance company to request whats called a formulary exception. Your plan will review the request to see if they’ll cover it. Typically, if the drug is approved, it will be provided to you at the cost found in one of the top tiers, such as tier 4 or 5, which means you will usually be responsible for a higher percentage of the cost than if the medicine was in a lower tier.

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Original Medicare Coverage Gaps: Are There Solutions

You might have a few choices when it comes to avoiding some of Medicareâs coverage gaps.

  • Do you want to stay with Original Medicare, but get help with cost sharing and coverage gaps like overseas travel coverage? A Medicare Supplement insurance plan might be an option for you. Sold by private insurance companies, these plans work alongside Original Medicare to cover certain out-of-pocket costs, like copayments and deductibles. You can view all 10 standardized plan types available in most states . You need to stay enrolled in Original Medicare. Learn more about .
  • If youâd like help with prescription drug costs, you may want to think about enrolling in a Medicare Part D prescription drug plan, a stand-alone plan that helps with medication costs. Itâs a good idea to enroll when youâre first eligible for Part D, or you could owe a late-enrollment penalty when you do sign up.
  • Another option is to get your Part A and Part B services through a Medicare Advantage plan. As an alternative way to get your Original Medicare benefits, these plans deliver your Part A and Part B benefits through a private, Medicare-approved health insurance company. Youâre still in the Medicare program if you enroll in a Medicare Advantage plan.

you might have, such as veteran benefits, employer-based coverage, or retiree insurance. These types of coverage may help fill some of the gaps in your Medicare insurance.

Medicare Part D Standard Drug Benefit

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The following table shows the Medicare benefit breakdown for 2020.

2020 Medicare Part D Standard Benefit

Coverage Phase
  • ^Or $3.60 and $8.95 , whichever is greater
  • ^Plan pays 15%, Medicare pays 80%
  • The costs shown in the table above represent the 2020 defined standard Medicare Part D prescription drug plan parameters released by the Centers for Medicare and Medicaid Services in April 2017. Individual Medicare Part D plans may choose to offer more generous benefits but must meet the minimum standards established by the defined standard benefit.

    The 2020 Medicare Part D standard benefit includes a deductible of $435 and 25% co-insurance, up to $6,350. The catastrophic stage is reached after $6,350 of out of pocket spending, then beneficiaries pay 5% of total drug cost or $3.60 and $8.95 , whichever is greater.

    2020 Donut Hole Discount:Part D enrollees will receive a 75% Donut Hole discount on the total cost of their brand-name drugs purchased while in the Donut Hole. The discount includes, a 70% discount paid by the brand-name drug manufacturer and a 5% discount paid by your Medicare Part D plan. The 70% paid by the drug manufacturer combined with the 25% you pay, count toward your TrOOP or Donut Hole exit point.For example: If you reach the Donut Hole and purchase a brand-name medication with a retail cost of $100, you will pay $25 for the medication, and receive $95 credit toward meeting your 2020 total out-of-pocket spending limit.

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    What Are The Medicare Donut Hole Rules For 2022

    Previously, being in the donut hole indicated you need to pay out-of-pocket costs until you reached the threshold value for more drug coverage. Nevertheless, the donut hole has been closing due to the introduction of the Affordable Care Act.

    Several changes are planned for 2022 to reduce your out-of-pocket costs during the coverage gap. It includes:

    • You will spend no more than 25% of the cost of brand-name medications.
    • The nearly total price of the medicine will count toward closing the coverage gap.
    • You must pay a dispensing fee for your medication. Your plan will cover 75% of the cost, while you will cover the remaining 25%.
    • Fees that do not count toward your OOP funding include 5 percent that your coverage pays and 75 percent that your plan spends toward the dispensing fee.

    Some programs even offer significant discounts when youre in the coverage gap phase. Its critical to carefully read your plan to see if this applies to you.

    Lets look at the examples to see how this works.

    What Do I Pay In The Coverage Gap

    Generally, once you reach the coverage gap, you’ll pay no more than 25% of the cost for your plan’s covered brand-name prescription drugs. The manufacturer and your Medicare Part D plan will pay the remaining 75% of the costs. Every Medicare Part D drug plan is different, so depending on your Medicare Part D drug plans benefits, you may pay even less than 25% for certain drugs. For instance, MedMutual Advantage plans cover certain generic drugs with the same copays as the initial coverage phase.

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    Stage 4catastrophic Coverage Stage

    In this last phase of Part D plan coverage, youll only pay a small coinsurance amount or copayment for covered drugs for the rest of the year.

    When your new plan year is beginning, you start over at stage 1 .

  • How Do My Medicare Prescription Drug Costs in 2021 Compare with 2020?, last accessed February 7, 2021,
  • How Do My Medicare Prescription Drug Costs in 2021 Compare with 2020?
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    This material is provided for informational use only and should not be construed as medical advice or used in place of consulting a licensed medical professional. You should consult your doctor to determine what is right for you.

    Humana is a Medicare Advantage HMO, PPO and PFFS organization and a stand-alone prescription drug plan with a Medicare contract. Humana is also a Coordinated Care plan with a Medicare contract and a contract with the state Medicaid program. Enrollment in any Humana plan depends on contract renewal.

    Some links on this page may take you to Humana non-Medicare product or service pages or to a different website.


    When Do I Enter The Coverage Gap

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    There are four coverage stages with a Medicare Part D drug plan. Depending on the stage you are in, you will be responsible for different amounts of your drug costs.

    At the start of the year, you begin in the deductible stage . Once youve paid your deductible, you move to the initial coverage stage which includes the standard copays and coinsurance outlined in your plans benefits. After these stages, you enter the coverage gap stage. This happens once the costs your Medicare Part D costs reach $4,130, also known as the total drug spend. This includes anything you, your plan, and others have paid toward your Part D covered prescriptions. The Centers for Medicare and Medicaid Services sets the total drug spend amount for Medicare Part D plans annually.

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    What Counts Toward Exiting The Coverage Gap

    When you are in the gap and paying 25% of covered drugs, your spending counts toward exiting the gap. The manufacturers drug discount of 70% also counts and will help you exit the gap faster.

    There are two things, though, that dont count toward closing the gap. These are:

    • The amount that your drug plan pays toward the cost of the drug, which is 5% in the gap
    • The amount that the drug plan pays toward the pharmacys dispensing fee, which is 75% of the fee in 2022

    Keep in mind that there are other things that dont count toward reaching the catastrophic limit, which are your plan premium and also what you spend on any drugs that arent covered by your Part D plan.

    What Are Medicare Part D Straddle Claims

    In the context of Medicare prescription drug plans, straddle claims refer to circumstances in which someones cost for one prescription brings them from one phase of coverage to the next. Thus, the claim falls within two different coverage phases.

    Because the donut hole is a coverage gap, a beneficiarys out-of-pocket costs arent so clear when theyre between phases. In these cases, your plan calculates what you owe for the prescription in question using the coverage gap discount and the prescription dispensing fee.

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    How To Get Help With Prescription Costs

    If you reach the coverage gap and need help with the costs of prescription drugs, here are a few tips:

    • Consider switching to generic or other lower-cost drugs. These drugs work just as well as brand-name drugs you may be taking now, so talk to your doctor or pharmacist to learn if these are an option for you.
    • Choose a Medicare Part D plan that offers additional coverage in the coverage gap. Some plans offer additional coverage, particularly for generic drugs, though typically have a higher monthly premium.
    • Ask about Pharmaceutical Assistance Programs. Some pharmaceutical companies offer help paying for medications for people enrolled in Part D coverage.
    • Some states also offer help paying for prescriptions, premiums and other drug costs. Contact Medicare to learn if your state offers this assistance.
    • Apply for Extra Help. Medicare and Social Security offer a program called Extra Help, which helps those with limited income.

    Medicare Coverage Gap Discount Program In 2022

    What is the Medicare donut hole?

    In 2022, The Medicare Coverage Gap Discount Program will provide eligible beneficiaries with a 70% manufacturer discount on brand-name drugs. In addition, your Part D carrier is responsible for 5% of the cost. This means the beneficiarys only responsibility is 25% of the drugs retail cost.

    For generic drugs, the beneficiary will also only be responsible for 25% of the retail cost of the medication.

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    What Happened In The Donut Hole Coverage Gap In 2020

    The Medicare donut hole coverage gap shrunk to its final cost level in 2020. Well explain more below about what this means for your coverage.

    The Medicare donut hole is one of four coverage levels that are in a Part D prescription drug plan.

    You enter the Medicare donut hole after your deductible period and your initial coverage period end and before you enter catastrophic coverage.

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