What Happens When the Medicare Part D Donut Hole Ends in 2020?

Starting in 2020, the standard Part D benefit amount set by Medicare will extend from the initial payment stage through the donut hole. In other words, if you enter the donut hole, the cost for your drugs will no longer shift mostly to you.

Not that long ago, people paid the full cost of their drugs out of pocket while in the donut hole, also called the “coverage gap.” Out-of-pocket costs in the coverage gap have steadily gone down for several years due to the Affordable Care Act of 2010 (Obamacare).

Is the Medicare Part D Donut Hole Going Away?

The donut hole is not really going away, because Medicare Part D still has four payment stages. You move through the Part D payment stages based on how much you, your plan, and others on your behalf have paid for your drugs during the year.

If you enter the donut hole, your total drug costs must hit a certain threshold to reach the catastrophic payment stage. Your plan pays most of the cost for your drugs in the catastrophic stage.

The Affordable Care Act requires drug manufacturers to provide a discount on drugs you buy while in the donut hole. The dollar amount of the discount counts toward your total drug costs, which helps you move through the donut hole faster.

What Is the Medicare Part D Donut Hole Amount in 2020?

In 2020, you pay 25 percent coinsurance for both brand-name and generic drugs in the donut hole. This is the standard benefit amount set by Medicare for the initial payment stage, which is now extended through the donut hole.

It’s important to note that you may still pay more for some drugs in the donut hole, because your Part D plan or Medicare Advantage plan (Part C) may charge copays rather than the standard coinsurance in the initial payment stage. Your plan’s copay amount may be less than the 25 percent coinsurance amount you may be charged in the donut hole.

For more information about Medicare, Contact the Medicare helpline 24 hours a day, seven days a week at 1-800-MEDICARE (1-800-633-4227), TTY 1-877-486-2048.