The Medicare prescription drug coverage gap and how to save money on your medications
If you’re on a Medicare prescription drug plan, you’re at risk of reaching a level where you must pay a higher percentage of the cost of your drugs. This is known as a coverage gap or the “donut hole.” Understanding it can help save you money.
Here’s how it works
There are actually four phases of a Medicare prescription drug plan:
- Deductible period: You’ll first need to meet your plan’s annual prescription deductible, if there is one. Until the deductible is met, you’ll pay the full cost of your prescriptions.
- Initial coverage period: Once your deductible is met, you’ll pay a copay or coinsurance for each prescription until you and your plan’s spending on prescriptions reaches the initial coverage limit.
- Coverage gap: Both the threshold and the ceiling in the coverage gap can change each year. In 2023, you’ll hit the coverage gap threshold when you and Regence have paid $4,660 for your medications, including what you paid toward the deductible. While you’re in the gap, you’ll be responsible for covering up to 25% of the cost of your drugs.
- Catastrophic coverage: In 2023, you’ll reach the coverage gap ceiling and enter the phase called “catastrophic coverage” once you’ve incurred $7,400 in out-of-pocket costs on covered drugs. In this phase, you’ll only pay a small amount for your covered drugs for the rest of the year. Your plan will pay the rest.
We’ll keep track of how much money you’ve spent for covered drugs and your progression through coverage periods. You can find this information in your monthly explanation of benefits (EOB) statements and on the Regence app. You’ll also get a phone call from us when you’re close to reaching the coverage gap so you won’t be surprised when you reach it.
NOTE: If your Medicare Advantage drug coverage is through a group employer, please refer to your Evidence of Coverage for a description of your benefits. You may have additional coverage in the gap.
How can you avoid or postpone reaching the donut hole?
You may be able to avoid reaching the coverage gap at all—or at least postpone reaching it for as long as possible—by managing your prescription drug costs. Here are some things you can try to keep your drug costs lower:
Ask your doctor or pharmacist about alternative drug options. There may be a much less expensive generic or biosimilar drug available that would work just as well as your current medication. There may also be a combination drug—a drug that can treat more than one health condition—that might work for you. You can also ask your doctor to make sure you’re only taking medications you really need. Your health plan may include access to online pharmacists who can answer your medication questions through regence.com or the Regence app.
- Shop around to find the best pharmacy. Be sure to use an in-network pharmacy. But even among pharmacies in your network, the price of a medication can vary. For example, the pharmacy at a warehouse club store like Costco can be less expensive than traditional pharmacies. If you have Regence pharmacy benefits, sign in and use Find a Pharmacy to search in your network and see how much a medication will cost at various pharmacies. Look for the yellow Preferred Pharmacy indicator for the best savings opportunity.
- Switch to a 100-day supply of medication for your ongoing prescriptions. Buying in bulk can sometimes bring substantial savings. It can also save you time and money by reducing trips to the pharmacy. Talk to your pharmacist to find out if your medication is available for a 100-day supply and pay the same as a 90-day supply. Some plans aren’t eligible for a 100-day supply.
- Get help from assistance programs. If you can’t afford to pay for your medications, look into assistance programs sponsored by drug companies, nonprofit organizations and the government. For example, you may be able to apply for the Extra Help program through the Social Security Administration (SSA) at www.ssa.gov. Most programs have limits on income and other requirements, so make sure to do your research.
- Take advantage of our Medication Therapy Management program if you qualify. The program offers one-on-one guidance from a pharmacist or other trained health care provider. They’ll make sure your medications are safe and working for you—and may help you find lower-cost options.
We’re here to help
You can learn more about your prescription drug coverage and get help finding ways to save money on your medications by signing in to your account at regence.com. Once signed in, you can review your health plan benefits, explore covered drug options, as well as live chat or message our Regence Customer Service team. Live online chat assistance is available from 8 a.m. to 5 p.m. PT, Monday through Friday. You can also call us at 1 (800) 541-8981 (TTY: 711). Our phone hours are 8 a.m. to 8 p.m. Monday through Friday. From Oct. 1 through March 31, we’re available from 8 a.m. to 8 p.m. seven days a week.