Part D plans are available to cover the cost of your prescription medications. While plans may vary in the level of benefit they offer, all plans are subject to the cost sharing described below. Part of this cost sharing is usually described as the “Donut Hole”.

Annual Deductible

The 2017 annual Part D deductible is $400. For some plans, that means that before your plan kicks in for any expenses, you may have to pay the first $400 out of pocket.

Initial Coverage

During initial coverage, your plan will split the cost of Rx drugs until you have paid a total of $3,700 out of pocket, either through copays or coinsurance.

Coverage Gap

This is the “Donut Hole”. In the coverage gap, you will be responsible for paying between 40-51% of the cost of your Rx drugs, and this lasts until you hit $4,950.

Catastrophic Coverage

Any Rx drug costs above and beyond $4,190 will cost the greater of 5%, or $3.30 for generics/ $8.25 for brand name. Only a small number of people ever reach this stage.