What is the Medicare "doughnut hole?"


What is Medicare "doughnut hole?"

The financial term of the day is: "Medicare 'Doughnut Hole.'"

Medicare's Part D prescription drug coverage has included the notorious Medicare "doughnut hole." At one time, when seniors' annual drug costs reached a certain level, they'd find themselves paying the full cost of their medications until they reached Part D's very high out-of-pocket limit. And only then would coverage pick up again. Health care reform is gradually closing that gap.

Thanks to the Affordable Care Act, the Medicare "doughnut hole" will be gone completely by 2020. At that time, recipients will pay just 25 percent of the cost of their medications no matter how much they spend, with no lapse in coverage.

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