The Medicare donut hole is actually the payment stage of Medicare Part D prescription drug coverage, officially known as the Coverage Gap. Once total drug costs reach $4,020 in 2020, the individual is in the donut hole.
- Those who reach the donut hole will be responsible for 25% of drug costs until they reach a total of $6,350 in out-of-pocket costs for that benefit year. (Learn about discounts in the Coverage Gap.)
- After reaching over $9,038 in total drug costs, it's on to the Catastrophic Coverage stage where one pays a fixed rate for medications throughout the remainder of the year.
- Those who take three to four or more brand-name drugs can reach this stage. Only three percent of Medicare beneficiaries ever reach the stage of Catastrophic Coverage.
- Your best bet to avoid the donut hole is to take good care of yourself and take generic medications whenever possible.
Learn even more about the Medicare donut hole with our free infographic.Last updated: 12-26-2019