When you think “donut hole”, its generally about the food you eat, instead of an extremely important issue with your Medicare health insurance coverage.

So what is the 2020 Medicare Part D donut hole? Many clients wonder how to identify a donut hole, and when they’ll enter one. The team at Pinnacle Finanical Services is here to answer these questions, and help agents understand all the different parts of Medicare, including these non-edible pastries.

The “donut hole”, also known as Coverage Gap, is used to describe a gap or pause in Medicare Part D, (Prescription Drug Coverage.)

The first item to consider with Medicare Part D, is called the deductible period. Some Medicare Part D plans have a deductible, which is the amount of money to spend on covered drugs before plan coverage starts. After meeting the deductible, Part D helps pay for all of the covered drugs for the rest of the year. The 2020 CMS-allowed deductible maximum is $435.00 for any Medicare Part D plan.

The next piece to consider is called the initial coverage period. After the Part D deductible is met, clients will enter the this stage. In the initial coverage period, clients pay a co-payment or co-insurance for covered medications. These amounts will vary depending on the drug formulary.

After $4,020 is spent for total prescription drug costs, in 2020 clients enter the donut hole gap. In 2020, they will pay no more than 25% of the price for brand name and generic drugs. Clients will stay in the donut hole until they have a total prescription drug cost of $6,350. After clients reach the $6,350, they enter the final catastrophic stage. In this, clients will only pay a small co-insurance or co-payment for their covered drugs for the rest of the year.

Pinnacle Financial Services offers a great online enrollment tool, Connect4Medicare. Tied to an agent’s NPN, this software will allow Pinnacle agents to easily compare Medicare plan options, quotes, and enroll clients in one easy-to-use system. Additionally, agents will still get paid full commissions, and be the agent of record.