What is the Donut Hole in 2016?
Whether you have a Medicare Advantage Plan or a standalone Medicare Part D Drug Plan, drug coverage that is offered through Medicare has the potential to get expensive.
What is the Donut Hole in 2016:
There are 4 levels of coverage in most Medicare Drug Plan, 3 levels if the plan does not have a deductible.
Level 1) The Deductible Level: The Plan does not pay for any of your medication cost, however you get to pay their negotiated price. (The average deductible for 2016 is $360.00)
Level 2) The Initial Coverage Level: The Plan offers you a reduced price for your medications, this is called a copay. During level 2, your copay will generally be about 25% of the cost and your plan will pay the other 75%. Once your medication cost totals $3,310.00 (2016 amount), you leave Level 2 and enter Level 3.
Level 3) The Coverage Gap or what is also known as the “Donut Hole”: Now that your medication costs have reached $3,310.00 (2016 amount), you enter Level 3. You will continue to pay a copay for your medications, but the copays will be a larger amount. During Level 3, your copays for generic medications will increase to 58% and for brand name medications your copays will increase to 45%. Once your medication costs have totaled $4,850.00, you leave Level 3 and enter Level 4.
Level 4) The Catastrophic Level: Relief! Once your medication costs total $4,850.00 (2016 amount) your copays for generic and brand name medications will only be 5%.
To review more information, you can Medicare’s website: https://www.medicare.gov/part-d
If you would like our help with finding the most cost-effective Medicare Part D Drug Coverage, please click here: Part D Finder Form
Authored by Robert Bache, aka MedicareBob. Owner of Senior Healthcare Direct. Senior Healthcare Direct – 1-855-368-4717.