ONE of the more complicated parts of Medicare is Part D covering prescription drugs, the infamous donut hole. Even with the changes for 2021, it’s still complicated.
However, it is not as scary money-wise as many people believe. I have highlighted the key factors below. Beyond the cost-sharing issue is that of the drugs covered by a given plan, the formulary.
You really need to make sure your medications are covered or be willing to change medication for others in the same class of drugs.
In 2020 the dreaded Part D “doughnut hole” has been filled. That hole is a coverage gap in which you used to face much higher out-of-pocket costs for your drugs, but that is no longer the case.
For 2021, the coverage gap begins when the total amount your plan has paid for your drugs reaches $4,130 (up from $4,020 in 2020). At that point, you’re in the doughnut hole, where you’ll now receive a 75% discount on both brand-name and generic drugs. Prescription drug manufacturers pick up 70% of that tab and insurers 5%. You pay the remaining 25%.
Catastrophic coverage, with the government picking up most costs, begins when a patient’s out-of-pocket costs reach $6,550, the maximum spending limit for beneficiaries in 2021, which is $200 higher than 2020’s cap. Any deductible paid before you entered the doughnut hole counts toward that annual maximum as does the 25% you contributed while in the doughnut hole and the 70% that pharmaceutical companies paid on your behalf.
You might want to read the full article linked above.