September and October are two months we get calls on the coverage gap or “donut hole”. This happens because there is a temporary limit on what your drug plan will pay while you are in the gap. The good news is not everyone will enter the coverage gap. The coverage gap begins after you and your plan have spent a certain amount on covered drugs. In 2019 once you and your plan combined have spent $3,820 you will enter the coverage gap.
Here’s the way the coverage gap works. Imagine you have a prescription that retails for $300 per month. Your copay, hypothetically, is $30. This means your plan would pay the rest of the cost or $270. Medicare will track what you paid ($30) and what your plan paid ($270) and count the cost of the drug as $300 for that month. Let’s also say that the other prescriptions you are taking equals $100 per month. You are now at $400 per month. In this example you would reach the coverage gap sometime in October.
Under most plans in 2019 once you have reached the coverage gap your plan will temporarily stop paying anything on your drugs. This means you will be responsible for the entire cost of your prescriptions. The silver lining around this very dark cloud is Medicare has negotiated a discount on the drugs you use. For name brand drugs you will pay 25% of the retail price of the drug and on generic drugs you will pay 37% of the retail price.
If you are eligible for Medicare but still on employer coverage you may wonder why you have never reach the coverage gap. This is because employer coverage does not have the “donut hole”. The coverage gap only applies to Medicare prescription drug plans. Also remember that Medicare drug plans can vary which means your coverage in the gap can vary.
If you have questions regarding any aspect of Medicare or Medicare health plans feel free call us at Alabama Health Guidance (256-648-5710), stop by our office at 885 Florence Blvd (Four Lane Shopping Center) or email me at email@example.com.