If you’re turning 65 or becoming Medicare eligible one of your challenges is choosing a drug plan. Many are confused by the term “Donut Hole” (also called the Coverage Gap). Medicare Prescription Drug Plans have four parts or phases, Initial Deductible, Initial Coverage, Donut Hole and Catastrophic. To understand the Donut Hole it’s important to understand each of these parts.

1. The drug plan you choose for 2023 might have no deductible or a deductible as high as $505. Many drug plans have no deductible on the inexpensive generic drugs, but have deductibles on the more expensive brand drugs. This is one way the insurance companies that market these plans control their costs and encourage their members to use generic drugs whenever possible.
2. After the initial deductible (if there is one) is met you enter the Initial Coverage Phase. During this period you only pay a copay or a percentage of your prescription drugs. If you purchase a drug with a retail value of $100, but pay $30, the entire $100 counts toward your Initial Coverage Limit. When the retail amount you are paying for all your drugs reaches $4,660(your Initial Coverage Limit for 2023) you have entered the Donut Hole Phase. Another way to say this is when what both you and your Part D Insurance Plan are paying for your drugs reaches $4,660 you’re in the Donut Hole.
3. While in the Donut Hole you will pay 25% for your brand-name drugs and generic drugs. When the total amount that you and your Part D Insurance plan reaches $7,400 you will exit the Donut Hole and enter the Catastrophic Phase.
4. During the Catastrophic Phase you pay the greater of 5% of retail or $4,15 for generic drugs.  For all other drugs (such as brand-name medications) you pay the greater of 5%  of retail or $10.35.

1.Make sure you have a current copy of Medicare & You. This handbook has details about what Medicare covers and provides websites and phone numbers where you can get additional information.

2.Remember that if Medicare does not pay for a medical procedure your Medicare Supplement will not pay for their share. If you are uncertain if a procedure is covered, you can probably find the answer in Medicare & You. You can also call Medicare at 1 800 633 4227 and they are opened 24 hours per day, seven days per week.

3.During Open Enrollment, which is from October 15^th through December 7^th, you can change Medicare drug plans. Also during this period you can change from a Medicare Supplement to a Medicare Advantage plan. Unless you have creditable drug coverage from a previous employers or the VA, do not drop your Medicare Drug Policy without enrolling in a new one. Medicare Beneficiaries who have gaps in coverage normally pay a penalty when they enroll in a Medicare Drug plan in the future.

4. Medicare Prescription Drug plans often make changes to their formularies, deductibles, preferred pharmacies and other features from year to year. Also, often Medicare beneficiaries have changes in their medications. It is in your best interest to register on http://www.medicare.gov and store your prescription drugs as well as preferred pharmacies on their site. This will allow you to quickly check during Open Enrollment to see if you need to change to a different Medicare Prescription Drug plan.

5. To ensure you pay the lowest amount for your prescription drugs make sure you obtain them from an pharmacy that your Medicare Drug plan considers a preferred pharmacy.

6. If your doctor recommends  you take a new drug that is not in the formulary of your current Medicare drug plan, you can contact their customer service and request an exception.

7.You can apply for a different Medicare Supplement at another insurance company any time of the year. Medicare beneficiaries sometimes do this when they find a company with a much lower premium. However, unless you have a guarantee issue because your current plan is being cancelled, you will have to go through medical underwriting. This means the insurance company will ask you medical questions, review your medical records and can decline you.

8. Even if you are enrolled in a Medicare Supplement that provides coverage in a foreign coverage, the coverage is limited and is not the same coverage that you have in the United States. Also, your Medicare Supplement will not pay its share until Medicare pays. Since a hospital in a foreign country is unlikely to file claim with Medicare, you may be required to pay your medical expenses and file a claim for reimbursement when you return home. It may be in your best interest to purchase trip insurance. 

1. Make sure you have a current copy of Medicare-and-You. This handbook has details about what Medicare covers and provides website and phone numbers where you can get additional information.
2. The number for Medicare is 1 800 633 4227 and they are opened 24 hours per day, seven days per week.
3. During Open Enrollment, which is from October 15^th through December 7^th, you can change Medicare Advantage plans.
4. Another change you can make during Open Enrollment is from a Medicare Advantage to a Medicare Supplement plan. According to page 23 of Choosing-A-Medigap, you have a one-year Trial right for Medicare Advantage plans. This means that during the first year, you can return to Original Medicare and enroll in a Medicare Supplement without going through medical underwriting. When an applicant is required to go through medical underwriting the insurance company can decline them or charge them a higher premium. According to page 22 of Choosing-A-Medigap, you can also enroll in a Medicare Supplement without medical underwriting if your Medicare Advantage policy is terminated. You can enroll in a Medicare Supplement as early as 60 days before your coverage ends, but no later than 63 days after your coverage ends. After your one-year Trial Right, most Medicare Supplement insurance companies will require you to go through medical underwriting unless your Medicare Advantage policy has been and will be terminated. BlueCross BlueShield is exception to this. They have the Blue-to-Blue Rule which allows their Medicare Advantage Policy holders to switch to one of their Medicare Supplements during Open Enrollment without medical underwriting.
5. If your doctor recommends you take a new drug that is not in the formulary of your current Medicare Advantage plan, you can contact their customer service and request an exception. Also, you may be able to obtain your drug at a lower cost at this website, www.needymeds.org. This organization helps people contact the manufacturer of an expensive drug to obtain it at a low cost or no cost. Their phone number is 1 800 503 6897.
6. To ensure you pay the lowest amount for your prescription drugs make sure you use on of your plans preferred pharmacies or their preferred mail order.
7. If you are traveling outside of the United States, make sure your contact your Medicare Advantage insurance company to determine if your coverage will be sufficient. You may need to purchase travel insurance.
8. Unlike Medicare Supplements, Medicare Advantage plans are regional. If you move out of your plan’s service area you will have a Special Election Period which begins 1 month before your move and 2 months after the move to enroll in a new plan. Read More