Part D beneficiaries who have high prescription drug expenses currently have to pay more once the total cost of their medicines reaches a certain threshold. That’s due to a quirky aspect of Part D called the coverage gap, also known as the “doughnut hole.”
Medicare: Soaring Drug Costs
Congress made the early close of the doughnut hole possible by requiring drug companies to pay higher costs for enrollees who are in the coverage gap. Currently, brand-name drugmakers pay only 50 percent of enrollees’ brand name drug costs.
Under the new budget deal, Part D enrollees will pay 25 percent of the cost of all their prescription drugs. This, from the time they enter the gap until they reach catastrophic coverage.
For 2018, the threshold for entering the doughnut hole remains at $3,750 worth of drug costs. Once a Medicare enrollee passes that limit, they pay 35 percent of the cost of brand-name drugs and 44 percent of generics.
They will continue to pay those costs until their out-of-pocket spending reaches $5,000. Once they reach that limit, they will pay no more than 5 percent of their drug costs for the rest of the year.