Find Medicare Part D Coverage

Choose Your State

Select Insurance Type

Medicare Costs and Coverage

2009 Medicare Part D Premium, Deductible, Coverage Gap (Donut Hole) and Catastrophic Coverage Definitions

Premium - your monthly cost for insurance coverage. The Medicare insurance premium does not include out of pocket costs including deductibles, co-insurance or co-pays.

Deductible - The standard 2009 Medicare Part D deductible is $295. Be aware that roughly half of all Medicare plans have a deductible. If you enroll in a Medicare Part D plan that has a deductible, you typically pay for 100% of your drug costs, up to $295. Once you reach $295, you typically pay 25% of your drug costs up to $2,700. If the plan does not have a deductible, you typically pay 25% of the drug costs up to $2,700.

Initial Coverage Limit - The standard 2009 Medicare Part D Initial Coverage Limit is $2,700. After you reach the initial coverage limit you are responsible for paying 100% of your drug costs, up to $4,350. This period is called the Medicare Coverage Gap, or the Donut Hole.

Catastrophic Coverage - When your total out-of-pocket drug costs equal $4,350, you will pay no more than 5% of your drug costs for the remainder of the year. Only about 4% of consumers will have enough out-of-pocket costs to reach the Catastrophic Coverage level.

What is the Coverage Gap or Donut Hole?

The Medicare Coverage Gap is a period between the Initial Coverage Limit and the Catastrophic Coverage period during which you pay for 100% of your prescription drug costs. This period is often referred to as the Donut Hole because of the gap in coverage during which you pay 100% of your drug costs.

When will I hit the Donut Hole?

Only about 26% of seniors that filled a prescription in 2007 reached the Donut Hole, and only 4% of seniors reached the Catastrophic Coverage period. Of the people that reached the Donut Hole in 2007, 50% of the people had reached it by the end of August.

The following conditions or drug classes most frequently reach the Donut Hole during the year.

Alzheimer's
Oral Anti-Diabetics
Proton Pump Inhibitors
Anti-depressants
Angiotensin Receptor Blockers
Statins
Osteoporosis
ACE Inhibitors

What do I do to prevent hitting the Donut Hole?

If you enroll during Open Enrollment, on or after November 15th 2008 for a 2009 PDP or MAPD plan, your Medicare Part D coverage will begin on January 1, 2009 and will continue for the entire year.

Identify plans that cover all your medications.
Research whether there are generic alternatives for any of your medications. You may visit websites such as www.ucomparehealthcare.com to find lower cost alternatives and consult your doctor about whether it is safe to switch medications.
Find out if any of your drugs are on the list of $4 and $5 drugs at your local pharmacies.
Buy from mail-order pharmacies. Buy your medications from your Medicare plans mail-order pharmacy. Mail-order pharmacies typically provide a 3-month supply of your medication at the cost of two co-pays.

What happens if I hit the Donut Hole?

Once you reach the Donut Hole or coverage gap, your share of the drug costs will increase, as you are now responsible for 100% of your drug costs until your total out-of-pocket costs for the year equal $4,350.

Things to consider after you reach the Donut Hole:

Don't stop taking your medications to save money when you reach the Donut Hole. This can be very dangerous. Medications are designed to have a cumulative effect over time. If you stop taking your medication(s), even for 1 month, you lose the cumulative effect of the medication. Medication adherence is critical to safely treat your condition.
Find out if your plan covers generic alternatives to your medications to reduce the cost. If there are lower cost alternatives, speak with your doctor about whether it is safe to switch medications.
Find out if any of your drugs are on the list of $4 and $5 drugs at your local pharmacies.
Buy from mail-order pharmacies. Buy your medications from your Medicare plan's mail-order pharmacy. Mail-order pharmacies typically provide a 3-month supply of your medication at the cost of 2 months co-pays.