Medicare Part D Coverage Gap ("Donut Hole")

Medicare Part D plans have a Coverage Gap, which is a temporary limit on what your drug plan will pay for prescription drug costs. If you do not receive a subsidy such as Extra Help from Medicare, or aren’t enrolled in a plan that offers additional Gap coverage, the combined amount you and your Part D plan spend on your Medicare Part D costs (not including premiums), determines if and when you will reach the Medicare Part D Coverage Gap. That combined amount is $4,020 (in 2020).

While in the Gap, you will pay 25% of the cost for generic drugs and brand drugs in 2020. You leave the Gap when you alone (not what the plan spends) spend a total of $6,350 in 2019. You then enter the "Catastrophic" stage, where the costs of your prescriptions are usually lower.