The Medicare Donut Hole is Closing Faster. What Does That Really Mean?

Updated on: February 1, 2020

Originally posted on: August 29, 2018
The Roadmap for Medicare staff specialize in all topics related to Medicare Part D, choosing a Medicare plan, and making smart health decisions in retirement.

The Medicare Part D coverage gap—commonly referred to as the donut hole—scheduled to close in 2020 is now closing one year early for brand-name drugs. The coverage gap for generic drugs will stay on track to close in 2020.

Here’s what you need to know:

What’s changing in 2019?

In a standard Medicare Part D plan, the third stage of coverage is the Coverage Gap, when beneficiaries pay more for covered brand-name and generic medications.  In 2019, the portion a beneficiary pays for a drug in this stage will drop to 25% of the cost for their brand drugs (instead of 30%) and 37% of the cost for generics (instead of 44%).  

What does that really mean?

The accelerated closure of the gap for brand-name drugs may result in bigger savings for Medicare beneficiaries who have a prescription drug plan.

Is the Coverage Gap stage eliminated with the faster closing of the donut hole?

No, the Coverage Gap stage is not being eliminated.
By 2020, the gap will close and the cost-sharing amount for beneficiaries in this stage will be 25% for both brand and generic medications.

What do I need to know about the Coverage Gap stage?

Medicare Part D plans have four different stages that impact what you will pay for your prescription medications. These stages are called Deductible, Initial Coverage, Coverage Gap, and Catastrophic Coverage.

Go to this article to learn more about what each stage means and how they impact your prescription medication costs. You can also find great tips on ways to avoid the coverage gap here.