What Is the Medicare Coverage Gap Discount Program

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With a rise in drug costs year over year, seniors on Medicare often wonder how to pay for their medications once they reach the Part D coverage gap (donut hole). The Medicare Coverage Gap Discount Program offers discounts to policyholders falling in this coverage phase.

How Does The Medicare Coverage Gap Discount Work?

With the passing of the Affordable Care Act, the Medicare Coverage Gap Discount Program became available to Part D beneficiaries. This program offers a discount on brand-name medications while in the coverage gap. It also allows for some coverage on generic medications.

Who Is Eligible for The Coverage Gap Discount Program?

To be eligible for the Coverage Gap Discount Program, all the following must apply

If any – but not all – of the above is true, unfortunately, you will not be able to utilize the Medicare Coverage Gap Discount Program. However, it is always best to discuss available options with your plan administrator if you struggle with copayments or deductibles.

How Do I Know If I Reach the Coverage Gap?

The coverage gap begins when you reach a set amount of spending for prescription drugs through your Part D plan for the calendar year.  Each month, you should receive a benefit statement from your Part D carrier explaining your out-of-pocket costs and how far you are from the next coverage phase.

How Does the Coverage Gap Discount Work With Brand-Name Drugs?

Companies who manufacture brand-name drugs sign contracts with Medicare, stating they will abide by Medicare’s Coverage Gap Discount Program. Once you reach the coverage gap, you will receive a set discount on the name-brand drugs that you purchase from a pharmacy.

While you are in the coverage gap, although you are only paying a portion of the drug, your cost and the manufacturer’s cost of the drug will count towards the catastrophic drug phase.

This discount you receive is recalculated annually. Each October, new guidelines are released for the following year. Since the prescription drug plans and guidelines change from year to year, it is recommended to review your Part D plan each year during the Annual Enrollment Period to ensure you enroll in the best plan for your needs.

Does the Coverage Gap Discount Program Work With Generic Drugs?

When it comes to generic drugs, the principle of the discount program remains the same. You will receive a set discount, regardless of the generic drug’s cost.

However, the most significant difference is that when you purchase a generic medication using the discount program, only the amount you pay out-of-pocket counts toward the catastrophic drug coverage phase.

Medicare Coverage Gap Discount Program in 2022

In 2022, The Medicare Coverage Gap Discount Program will provide eligible beneficiaries with a 70% manufacturer discount on brand-name drugs. In addition, your Part D carrier is responsible for 5% of the cost. This means the beneficiary’s only responsibility is 25% of the drug’s retail cost.

For generic drugs, the beneficiary will also only be responsible for 25% of the retail cost of the medication.

How To know If I Qualify For The Medicare Coverage Gap Discount Program

To understand the discount program, it is best to speak with a licensed agent. Our licensed agents are experts in all things Medicare. We will be able to answer all your questions on the first interaction, clearing any confusion you may have.

To contact a Medicare expert, you can simply call the number at the top of the page. Can’t talk now? Complete our online rate form and we will reach out to you. We are available six days a week to help you get on the right track with your Medicare coverage.

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