If you have a Medicare Part D prescription drug plan, you need to understand what the donut hole, or coverage gap, is and how it affects you.
Part D prescription drug coverage has four stages, or periods, including the donut hole.
Not everyone will have all the stages. For example, you might not have a coverage gap because you get extra help from the government's Low-Income Subsidy program.
What stage you're in depends on how much you've spent on prescription drugs.
If your plan has a deductible, you'll pay the full negotiated price for your prescription drugs until it's met.
After you've met your deductible, your plan pays for some of your drug costs, and you pay a copay. How long this applies to you depends on your drug costs and your plan's benefits.
After your total drug costs reach a certain amount, you enter the donut hole, or coverage gap. This amount changes each year. You can find out this year's limit by visiting Medicare.gov.
At this point, you're responsible for 25% of the cost of your drugs, instead of just paying a copay.
This is only temporary until you've reached the next spending threshold, which puts you into catastrophic coverage.
You enter catastrophic coverage after you've paid a certain amount in out-of-pocket costs. This amount changes each year. You can find out this year's limit by visiting Medicare.gov.
During this period, you pay much less for your covered drugs for the rest of the year.
If you have a Blue Cross Blue Shield of Michigan Part D plan, check your explanation of benefits statements. They tell you what stage you're in and how much you've spent on prescription drugs to date.