UNITED STATES─Toni: Last fall, I was diagnosed with a serious illness and began taking Humira which is very expensive costing over $5,000 per month. I was told that the Medicare Part D “Donut Hole” was vanishing in 2020 and I would not have to more than I did in 2019.
This did not happen when I went to pick up my prescription at CVS after January 1. I had to pay over $1,700 for the Humira and my diabetic insulin I was under the impression that my prescriptions were not going to be as expensive as 2019. Can you please explain what has happened? Shane from West U area.
Shane: The “Donut Hole” is a stressful time for most Americans because the cost of your brand name drug is simply more expensive. Now the Donut Hole is called the “Donut Hole” discount and that discount is 25 percent of the cost for both brand-name and generic prescriptions.
When Healthcare Reform began, the Donut Hole slowly began to close, but was never intended to go completely away.
In the past, one had to pay 100 percent of the cost of the prescription for brand-name drugs when one would hit the “Donut Hole” and now the cost is a whopping 25 percent of the brand-name and generic drugs.
It is amazing how the cost of prescriptions has increased. Maybe this is because the prescription drug manufacturers and Part D plans have to pay a percentage to Medicare for the prescription. In 2020, the prescription drug manufacturer must pay 70 percent and the Medicare Part D plan must pay 5 percent and the Medicare beneficiary must pay 25 percent until the out of pocket cost reaches $6,350.
Below are the Medicare Part D costs before and after reaching the “Donut Hole” discount:
Part D changes for 2020 are:
- Initial Deductible: will be increased by $20 from $415 in 2019 to $435 in 2020.
- Initial Coverage Limit: will increase by $200 from $3,820 in 2019 to $4020 in 2020 where the 2020 “Donut Hole” begins.
- Out-of-Pocket threshold cost: or (TrOOP) will increase from $5,100 in 2019 to $6,350 in 2020.
- Coverage Gap (Donut Hole): begins once you reach your Medicare Part D plan’s initial coverage limit ($4,020 in 2020) and ends when you spend a total of $6,350 out-of-pocket in 2020.
- Does the Donut Hole go away…in 2020 is now called the Donut Hole Discount: Part D enrollees will receive a 75 percent Donut Hole discount on the total cost of their brand-name drugs purchased while in the Donut Hole. The discount includes, a 70 percent discount paid by the brand-name drug manufacturer and a 5 percent discount paid by your Medicare Part D plan. The 70 percent paid by the drug manufacturer combined with the 25 percent you pay, count toward your TrOOP or Donut Hole exit point.
For example: If you reach the Donut Hole and purchase a brand-name medication with a retail cost of $100, you will pay $25 for the medication, and receive $95 credit toward meeting your 2020 total out-of-pocket spending limit.
Be sure that all prescription drugs are covered on the new Part D prescription drug standalone or MAPD plan that you choose and enroll in for a 1st of the month effective date whether turning 65 or retiring past 65 and leaving employer benefits.
Toni King, author of the Medicare Survival Guide® is giving a $5 discount on the Medicare Survival Guide® Advanced book to the Toni Says Medicare column readers at www.tonisays.com.