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Coverage Gap

What is a coverage gap?

A coverage gap, sometimes called the “donut hole,” is a temporary limit on drug coverage under Medicare Part D drug plans. An individual enters the coverage gap after spending a predetermined amount of money on covered drugs. This amount changes yearly. In 2022, the coverage gap began at $4,430. 

Most Medicare drug plans have coverage gaps.  

Individuals who have “Extra Help” under Medicare Part D will not enter the coverage gap. Extra help assists in the payment of deductibles, copays and premiums for those with limited income and resources.  

How do coverage gaps impact healthcare?

Coverage gaps impact healthcare because they determine who pays the cost of drugs after the beneficiary and plan meet a certain amount of money.  

Once an individual enters the coverage gap, they will pay no more than 25% of the cost for their plan’s covered brand-named drugs. The manufacturer pays 70%, and the plan pays 5%. 

Coverage gaps also impact healthcare because they may make drugs less accessible to those who need them.