What is the Part D Coverage Gap (“donut hole”)?

In a Medicare Part D plan, Stage 3 is called the Coverage Gap or the “Donut Hole.” You enter this stage after you and your drug plan together have spent an amount set by Medicare for your covered drugs. You continue in this stage until your out-of-pocket costs reach another amount set by Medicare. This amount includes your deductible, coinsurance and copayments in the Initial Coverage stage, the manufacturer’s discount you get on covered brand-name drugs in the Gap; and what you pay for medications while in the Gap. To learn more about the stages of Medicare Part D here.

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