The Donut Hole

The Donut Hole, also known as the Medicare Part D coverage gap, can be very stressful (read expensive.) However, it is better this year (2012) than before. All approved Medicare Part D plans allow only a limited amount of benefits each year. In 2012, when you and your insurance company have spent $2,930 on drug costs, you end up paying for prescriptions out of your pocket. Starting this year, when and if you reach this gap, you receive a 50% discount on most brand name drugs and a 14% discount on generic drugs.

As always, after you’ve spent a certain amount for prescriptions out-of-pocket ($4,700 in 2012), catastrophic coverage starts and you only pay 5% of your prescription cost for the rest of the year.

This year, the 50% discounts are applied to your out-of-pocket totals, so it may be faster to get through the donut hole.

Also, Prescription Drug plans can change significantly from year to year. It is a wise idea to shop for the best plan for you each October/November. For more information or help, call your agent or visit

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