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What IS the Doughnut Hole?
The "doughnut hole" refers to a gap in prescription drug coverage under Medicare Part D. In 2014, once you reach $2,850 in prescription drug costs (which include both your share of covered drugs and the amount paid by your insurance,) you will be in the coverage gap. In 2014, you will get a 52.5% discount on brand-name drugs and a 28% discount on generic prescription drugs while you are in the coverage gap. When your total out-of-pocket costs reach $4,550, you qualify for "catastrophic coverage." At that point, you are responsible for only 5% of your prescription drug costs for the rest of the year.
(If you receive "Extra Help" - a Medicare program to help people with limited income and resources pay Medicare prescription drug costs - you do not have a coverage gap. So the discount does not apply.)
Because of the Affordable Health Care Act of 2010, the doughnut hole will gradually narrow until it disappears in 2020. Please see the Health Law Guide to find out more about the health law and how it benefits you.If you want to see whether you are eligible for the Medicare Extra Help Program, check out Benefits Quicklink.
To share your experiences with the doughnut hole calculator and ask questions, visit the Medicare Part D online community group.
Find out more about how the new health care law helps people who fall into the doughnut hole this year by checking out this fact sheet.
Learn more about the doughnut hole at this AARP Bulletin guide on Medicare Prescription Drug Coverage.