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You may wonder “Why am I comparing Medicare to a delicious dessert?” Well, for visual learners, Medicare is best described by using a donut! After reading this, you will always recall Medicare part D when you buy yourself a delectable donut. 

There are deductibles in some plans for Medicare. The deductibles are shown to be the area before the donut begins. In this area, there is no coverage. Once you have paid the deductible, then your plan will cover your drug costs. Deductibles can vary depending on what plan you have. 

The initial coverage occurs in the next stage of the donut. This area is between the outer circumference of the donut to the hole in the donut. After you pay your deductible, the plan will help cover the drug costs.

In this stage, this is where you would pay the plan’s coinsurance and copay where the plan only covers some of the costs of the prescription drugs. The initial coverage period tends to end when you have collected close to $4,000 in total drug costs. After the amount is reached, you will enter a coverage gap.

The coverage gap occurs in the next stage. You guessed it, this refers to the donut hole! In this area, you are responsible for  the cost of your prescription drugs. At this point, your plan does not pay for your prescription drugs.

Fortunately there are federally funded discounts that are up to 75% to help you pay for the prescription drugs at this time, but this does not automatically go into effect.  For brand name and generic drugs, you will spend about 25% of the drug costs. “Why is here a gap,” you may wonder. There is a gap, because Medicare provides comprehensive coverage and catastrophic coverage, while staying within a budget. 

The catastrophic coverage is the next stage of the donut. This area is the other part of the donut where you have coverage, because you went over $5,000 in spending for prescription drugs. Here, your coverage will lend you a few dollars for prescription drugs. You will pay lower copayments or coinsurance at this point for your covered, prescription drugs. You will possibly pay a small amount of 5% of the costs. 

Lastly, the area after the donut is where the amount resets. By this time, it is January 1st and your plan will reset. It is highly recommended to seek out a professional to ask about Medicare Part D and to view your options. Medicare can perplex people, therefore it is always great to ask for help in understanding your plan. 

Your Part D plan will be accountable for telling you how much you have spent on prescription drug costs. It should also tell you information about how much you have spent throughout the coverage periods through statements that you will receive monthly.

Learning about Medicare can be tricky. By using a donut as a visual, it is easier to understand how it works. If you have any questions about your plan or Medicare in general please feel free to seek out one of our professionals on our website.

 

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