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Reaching the other side of the Medicare ‘donut hole’

By The Health News Team | June 16, 2021
Woman smiling within a hole of a donut pool float.

It's hard to imagine that something as enticing as a frosted donut would be associated with Medicare drug coverage, but it is.
The "donut hole" refers to the coverage gap in most Medicare drug plans - a temporary limit on what your drug plan will cover. While not all Medicare drug plans and Medicare Advantage Plans come with a donut hole, many do include a gap in coverage for prescription medications.
Where the donut hole begins
The donut hole begins when you have spent a certain amount for covered prescription drugs through your drug plan. In 2021, once your prescription drug expenses reach $4,130, you enter the coverage gap. This threshold varies from year to year.
Getting to the other side of the coverage gap
While you are in the donut hole, you'll pay no more than 25% of the full cost of your plan's covered brand-name prescription drugs. This 25% discounted rate applies to prescriptions purchased at retail and mail-in pharmacies. During this time, the drug manufacturer and your drug plan will pay the other 75% of the cost until you reach the other side of the donut hole.
Here are the items that will help you reach the other side of the donut hole:

  • The Part D plan's yearly deductible, coinsurance and copayments

  • The discount received on the brand-name drugs while in the coverage gap

  • What you pay in the coverage gap

Here are the items that
don't count toward the coverage gap threshold:

  • The Part D plan premium

  • Pharmacy dispensing fee, if any

  • What is paid for uncovered drugs

Post-donut hole drug coverage
When you reach the other side of the coverage gap, you enter the catastrophic payment stage. In 2021, when your total out-of-pocket costs between you, your plan and the drug manufacturer reach the $6,550 threshold, your plan will cover most of the cost for your prescription drugs again. This dollar amount varies each year too.
Learn more about Medicare and avoiding the donut hole at a free seminar on Understanding How Medicare Works. To register, call 1-800-82-SHARP or visit

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