Explanation of the “Donut Hole” or “Coverage Gap”

• The Donut Hole (or Coverage Gap) begins when the total spent on drugs exceeds $2830.
  
  
• The $2830 total includes the amount spent by you plus the amount spent by your insurance company.
  
  
• The $2830 threshold total does not include monthly premiums paid by you.
  
  
• The Donut Hole (Coverage Gap) ends when you have spent a total of $4550 of your own money on drugs (not including the money you spent on monthly premiums).
  
  
• While in the Donut Hole you must pay 100% of the cost of your drugs unless your Part D plan offers special Donut Hole or Gap coverage (only a few plans offer this special coverage and most of these plans only cover generic drugs).
  
  
• Some plans allow you to purchase drugs while in the Donut Hole at the lower price negotiated by the insurance company while others require that you pay the full retail pharmacy list price.
  
  
• Once you have spent $4550 of your own money during the year, the catastrophic coverage begins. The individual pays approximately 5% of the cost of the drugs from then on until the end of the year. There is no carry-over from year to year. Each year all plans start anew.