My name is Eric Bowman, and if you have questions about insurance, this is the blog you need to read. I was always confused when I had to purchase insurance. I would either end up paying for insurance I didn't need or I wouldn't buy the right policy. I finally decided that I was going to learn all I could about insurance policies so that I would understand exactly what I was buying. Now, I am completely satisfied with my insurance and the coverage is just what I need. I realized that there are others who are probably just as confused as I was, so I am writing this blog to help others get the best insurance for their needs and budget. I hope that my blog gives you the information you need to make the right choices when purchasing insurance.
When you think of a donut hole, you usually think of a sweet dough ball. Unfortunately, a donut hole means something completely different if you have Medicare Advantage insurance. When you find yourself in it, it is not very sweet. What is a donut hole? How does it work, and how do you get out once you are in it? Here is some information to help you understand this situation.
What Is A Medicare Insurance Donut Hole?
If you have prescription drug coverage under your Medicare Advantage insurance plan or Part D with regular Medicare, your coverage has a coverage gap. This coverage gap is often referred to as a donut hole. During this coverage gap, there is a limit on how much Medicare will pay for your covered drugs.
Officially under the Affordable Care Act of 2020, the donut hole closed for good. But a coverage gap remains part of Medicare's drug plan that most people, including Medicare representatives and pharmacists, still call the donut hole.
How Does A Donut Hole Work?
You enter the donut hole once you and Medicare pay a certain amount for your covered prescription drugs. This amount changes from year to year and is $4,660 in 2023. Once you hit this amount, you have limited drug coverage until you get out of the hole by paying $7,400 out of pocket.
Under the current coverage gap program, you pay up to 25% of your medication's cost and 25% of the drug dispensing fee. With the current high medication costs, your out-of-pocket costs can be substantial while in the hole.
For example, if you take a drug with a manufacturer cost of $1,000, your out-of-pocket cost while in the hole would be up to $250 plus 25% of the dispensing fee.
Only some people have a coverage gap. You do not have to worry if you qualify for additional drug coverage under Medicare or through your Medicare Advantage insurance.
How Do You Get Out Of The Hole?
Depending on the costs of your medications, you can eventually get out of the hole. You do this by meeting the $7,400 out-of-pocket cost. But fortunately, this total cost does not have to come directly from your pocket.
You will receive credit for the discounted drug amount you pay, along with what the manufacturer pays for the drug will go towards your out-of-pocket costs to help you get out of the hole. You will also receive credit for your deductible, coinsurance, and copayments.
For more information, contact an insurance provider such as Mike McClure - Brightstar Insurance.