Most Prescription Drug Plans have a coverage gap, known as the donut hole. This means that there’s a temporary limit on what the drug plan will cover for drugs. The donut hole begins after you and your drug plan together have spent a certain amount for covered drugs.

For 2015, once you enter the donut hole, you pay 45% of the plan’s cost for covered brand-name drugs and 65% of the plan’s cost for covered generic drugs until you reach the end of the coverage gap. Not everyone will enter the coverage gap because their drug costs aren’t high enough.

Once you get out of the donut hole, you enter catastrophic coverage. Within this stage, you only pay a small coinsurance amount or copayment for covered drugs the rest of the year.

Pete Blasi