Medicare Part D donut hole is a coverage gap that can leave you with huge medical bills if you’re not careful. But don’t worry, there are ways to avoid it and the high costs of prescription brand-name drugs! Let’s review some tips from experts on how to avoid the donut hole altogether and lower your costs.

The Medicare Part D donut hole

Also known as the Medicare Part D coverage gap, the donut hole is a period of time when Medicare Part D prescription drug coverage stops and starts again. This can happen if you reach the maximum amount that your Medicare plan will cover for drugs in a year. Once you reach this out-of-pocket spending limit ($5,030 in 2024), you’re in the donut hole.

The Donut Hole going away

The donut hole has been closing for some time in various ways. Before 2019, it was necessary to pay 100% of the cost of brand-name prescription drugs. Now, once you enter the coverage gap after $5,030, you will pay 25% of the cost. This means pharmaceutical companies are responsible for more of the cost.

Avoid the coverage gap

Worried about the donut hole? There are a few ways you can close that coverage gap and/or reduce your out-of-pocket costs:

Order your medications by mail

That’s right, you can lower costs while in the donut hole simply by ordering your medications by mail. You’ll save money on gas, time, and the overall cost of your medications.

Use generic prescriptions

If your doctor prescribes a brand-name drug, ask if there is a generic version that you could take instead. Generics cost less because they are not patented like brand-name drugs.

Find a new prescription drug plan

If your current Medicare prescription drug plan isn’t working for you, it may be time to find a new one. There are many plans available, and each has different costs and coverage. You can use a Medicare Personal Shopper tool to compare plans and find one that fits your needs.

Try to get drug manufacturer’s discounts

Some drug manufacturers offer discounts on their drugs if you meet certain criteria. For example, you may be eligible for a discount if you have Medicare and are in the donut hole. Check with your doctor or pharmacist to see if any discounts are available.

See if you qualify for the Part D low-income subsidy (LIS)

The Part D Low-Income Subsidy (LIS) also known as Extra Help is a program that helps people with limited incomes and resources pay for their prescription drugs. To see if you qualify, visit the Social Security Administration website or talk to your insurance broker.

Visit two pharmacies (pay cash prices outside of Medicare)

You may be able to lower your costs by visiting two pharmacies. One pharmacy may charge a higher price for a drug, but the other may offer a lower cash price.

Research disease funds

If you have a chronic or rare disease, there may be foundations or other organizations that can help you pay for your medications. These organizations typically have funds that can help people with specific diseases pay for their medications.

Find State Pharmaceutical Assistance Programs (SPAP)

State Pharmaceutical Assistance Programs (SPAPs) are state-run programs that help people with limited incomes pay for their prescription drugs. To find out if you qualify for an SPAP, contact your state’s Medicaid office or talk to your insurance broker for guidance.

Talk to an expert

If you’re still not sure how to avoid the Medicare Part D donut hole, talk to an expert. They can help you understand your options and find a plan that fits your needs. They can also help you understand how to avoid the Medicare Part D donut hole. Or you can use modern tools to help you, like Medicare Coach. 

Bottom line

The best way to avoid the Medicare Part D donut hole is to be prepared and do your research. There are many resources available to help you lower your costs, so don’t hesitate to ask for help.

Planning ahead with some of the strategies we’ve discussed can help avoid any future problems. And if you do find yourself in the donut hole, remember that there are ways to get out of it or at least reduce your costs.

Questions about Medicare?

Shoot us an email at medicare@hihella.com.

Article updated on October 24, 2023