What you pay before the Coverage Gap for Medicare Part D
- All drug costs until you reach your deductible.
- You pay your plan-designated share of the cost after you reach your deductible. Then after you reach the Coverage Gap, you will pay up to 25% of the cost of covered brand name drugs, plus 25% of the dispensing fee. And this only applies to covered drugs.
What you pay after the Coverage Gap for Medicare Part D
Once you spend a certain amount, you leave the Coverage Gap and move on to catastrophic coverage stage. It assures you only pay a small coinsurance amount or copay for covered drugs for the rest of the year.
How does the Medicare Part D Coverage Gap work?
If your total prescription drug costs (that includes what your plan has paid, deductibles, copays, and coinsurance) are more than the initial coverage limit for the year, you may be in the Medicare Part D Coverage Gap. That means you’ll probably pay about 25% of your plan’s cost for every covered prescription drug.
Which costs count toward the Medicare Part D Coverage Gap?
- Coinsurance/copays for your medications
- Any discount you receive on your brand name prescription medications
When do you leave the Coverage Gap?
When you reach your out-of-pocket limit on your prescription drug coverage, you are out of the Coverage Gap. Once you leave the Coverage Gap, you only pay a small coinsurance amount or copay for covered drugs for the rest of the plan year.
How to avoid the Medicare Part D Coverage Gap
The best way to avoid the Coverage Gap is to try and keep your prescription drug costs low if you can, so you don’t reach the initial coverage limit. Here are four ideas for avoiding the Coverage Gap:
Choose generic prescription drugs
Most brand name prescription medications have lower-cost generic alternatives. The FDA (Federal Drug Administration) requires generic medications to have the same active ingredients as brand versions, so you’re receiving the same medicine for less money.
Order your medications by mail and in advance
Many Medicare Part D prescription drug plans have savings by mail. For example, you might save by ordering a 90-day supply by mail instead of picking up a 30-day supply at the drugstore.
Find drug manufacturers’ discounts
Some drug manufacturers offer their products at a discount directly to consumers. If you prefer brand names over generic prescription drugs, you may be able to save by ordering directly from the manufacturer.
Try Extra Help or State Pharmaceutical Assistance Programs
If you qualify, the Extra Help program (also called Low-Income Subsidy) can provide financial assistance with Medicare Part D costs. You must have limited income to qualify, and the specific qualification threshold may change each year. Some states also have assistance programs. Look for details on the Medicare.gov page.
Shop Empire for a new Medicare Part D prescription drug plan
Consider comparing Medicare Part D plans every year to find a plan that is within your budget while providing the medications you need.
Do Medicare Advantage plans cover the Coverage Gap?
While Medicare Advantage plans do not cover the Coverage Gap, an insurer like might offer coverage of certain medications in the gap.
When is the best time to look for a new Medicare Part D plan?
You can make changes to your Medicare Part D plan during the Annual Enrollment Period, which is October 15 to December 7.
If you are just signing up for Medicare, you can also sign up for Medicare Part D during your Initial Enrollment Period (IEP). During this time, you can apply for Part D coverage along with Medicare Part A and Part B. To avoid penalties, it's best to enroll in Part D as soon as you're eligible, even if you are not taking prescription medications.
Find Plan D prescription drug coverage that fits your needs.