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What Is the Medicare Coverage Gap?

The Medicare coverage gap is the period between coverage limits for Medicare Part D drug coverage. Medicare Part D pays prescription drug costs up to certain point, then stops paying until a higher threshold is reached.

  1. Deductible and Coverage

    • Plan D is offered by many different insurance companies, and each company sets its own deductible and coverage limits. However, no plan can have a higher deductible than the amount set by Medicare for that year.

    The Gap

    • Once you have reached the out-of-pocket coverage limit in your plan, you enter the "gap" in the plan. Continue using your medical card so your out-of-pocket expenses can be tracked.

    Catastrophic Coverage

    • The plan must begin paying again when you have reached the Medicare-determined threshold for "catastrophic" coverage. This amount is adjusted yearly for inflation.

    Generic Drugs

    • Switching to generic drugs can help keep your out-of-pocket costs low all year. You also can choose to switch to generics when you reach the gap to reduce your costs until catastrophic coverage begins.

    Considerations

    • If your income is below the annual limit set by the government, you may qualify for the Full Extra Help program, which requires no premium or deductible and limits your co-pay amount. There's also a Partial Extra Help program that uses a sliding scale to determine your premium and deductible.

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