Effective January 1, 2025, you can say good-bye to the donut hole and welcome the $2,000 cap. Along with the limit on out-of-pocket drug costs comes the new Medicare Prescription Payment Plan. This resembles an installment payment plan for Part D drug cost.
Click here to learn more about the $2,000 cap and the Medicare Prescription Payment Plan.
The following information is for historical purposes only.
What were drug discounts in the
Coverage Gap?
Those who reach the Coverage Gap in a Part D prescription drug plan (also called the “donut hole”) and don’t receive extra help from Medicare get a discount on covered brand-name and generic drugs they buy at a pharmacy or through mail-order. The discount is automatic, coming off the price of a prescription.
- The discount on prescribed medications will be 75%. For a prescription that costs $100, the discount would be $75.00, leaving $25.00 out-of-pocket.
- The pharmacy can add a small handling fee, typically $2 or $3, on top of that amount for brand-name drugs.
Companies that make brand-name prescription drugs must sign an agreement with Medicare to participate in the discount program. All of the covered Part D brand-name drugs they make are then covered during the Coverage Gap for that calendar year. Manufacturers that produce over 99% of the brand-name drugs used by Medicare beneficiaries participate in this program. The discounts have saved those who end up in the donut hole an average of $768.
Last updated: 12-05-2024