What does that mean for your Medicare Part D generic drug coverage?
Open enrollment for 2020 Medicare plans runs from October 15 — December 7. If you’re planning on enrolling in a Part D plan, here’s an important update you should know about.
As anticipated, the coverage gap (aka donut hole) will close for generic prescription medications covered under Medicare Part D plans beginning in 2020.
A quick refresher on Medicare Part D
If you’re eligible, you can choose to enroll in a Medicare Part D plan. Part D plans provide varying levels of coverage for outpatient prescription drugs, like the drugs you pick up at the pharmacy and take at home.
There are four stages of coverage in Part D plans, and depending on what plan you have, how much you pay for your medication can change depending on which phase you’re in.
The phases are: deductible, initial coverage, coverage gap (or donut hole), and catastrophic coverage. You move through these phases in this order, depending on how much you and/or your plan has spent on your covered prescription drugs that year.
What the donut hole is and how it’s closing
When Medicare Part D plans first became available in 2006, the third phase was known as the coverage gap because during that period, beneficiaries received no coverage for their prescription drugs and were responsible for 100% of the cost. This gap in coverage was nicknamed the donut hole.
Lawmakers later formed a plan to “close” the coverage gap in standard Part D plans (by 2019 for brand-name drugs and 2020 for generics), so that a beneficiary’s spending would not increase when they entered the donut hole phase of coverage.
In 2019, a person in a standard plan paid 37% of the cost of a drug once they fell into the donut hole (up from 25% in the initial coverage phase). This left many people suddenly having to pay more out of pocket for the same drug.
Beginning in 2020, beneficiaries in standard Part D plans will only pay 25% while in the donut hole — the same amount they pay in the phase before the donut hole. This means they will no longer pay more when they fall into the donut hole.
Why the donut hole is considered “closed” even if you’re still paying out of pocket for medications
At first, it can sound a little misleading to say the coverage gap is “closed” or “gone” when you’re still spending your own money on medications. The gap is considered closed because beneficiaries no longer face the gap in coverage the way they did in the past. The amount you pay out of pocket for your medication in the donut hole will now be the same as what you pay in the initial phase of coverage.
Of course, there are always exceptions
There are many different Part D plans available. Depending on which one you enroll in, your coverage could be different. The new 25% rule for generics applies to standard plans. Some Part D plans offer extra coverage during the coverage gap, so you end up paying less than 25% while in the donut hole.
If you’re unsure what your Part D plan covers during each phase of coverage, be sure to ask your plan provider before you re-enroll or enroll in a new plan for 2020.
Whether or not you’re in the donut hole, don’t forget to check Blink to see if you can save.
A lot of people don’t actually know if or when they’ll fall into the donut hole. With the current lack of price transparency, it can be hard to predict. If you find you’re having difficulty affording your medications, whether you’re in the donut hole or not, check Blink Health to see if you can save.
Blink Health is not insurance. The discount prescription drug provider is Blink Health Administration, LLC, 536 Broadway, 2nd Floor, New York, NY 10012, (844) 366–2211, www.blinkhealth.com