Donut Hole

Medicare drug plans previously had a coverage gap (also called the “donut hole”). The donut hole was a temporary limit on what the drug plan would cover for drugs. Now all Medicare plans include a $2,000 cap on what you pay out-of-pocket for prescription drugs covered by your plan. If your out-of-pocket spending on covered drugs reaches $2,000 (including certain payments made on your behalf, like through the Extra Help program), you’ll automatically get “catastrophic coverage.” That means you won’t have to pay out-of-pocket for covered Part D drugs for the rest of the calendar year.