2021 Medicare Part D deductible and donut hole costs

Part D changes for 2021 are:

• Initial Deductible: will be increased by $10 from $435 in 2020 to $445 in 2021.

• Initial Coverage Limit: will increase by $120 from $4,020 in 2020 to $4130 in 2021 where the 2021 “Donut Hole” begins.
• Out-of-Pocket threshold cost: or (TrOOP true out of pocket) will increase from $6,350 in 2020 to $6,550 in 2021.
• Coverage Gap (Donut Hole): begins once you reach your Medicare Part D plan’s initial coverage limit ($4,130 in 2021) and ends when you spend a total of $6,550 out-of-pocket in 2021.
• Does the Donut Hole really go away? In 2020, the Donut Hole began being called Donut Hole Discount.
• What is the Donut Hole Discount? Part D enrollees will receive a 75 percent Donut Hole discount on the total cost of their brand-name drugs purchased while in the Donut Hole. The discount includes, a 70 percent discount paid by the brand-name drug manufacturer and a 5 percent discount paid by your Medicare Part D plan. The 70 percent paid by the drug manufacturer, 5 percent Part D plan discount combined with the 25 percent you pay, count toward your TrOOP or Donut Hole exit point.
• Generic Drug when one reaches Medicare Part D Donut Hole: pay a maximum of 25 percent co-pay on generic drugs purchased while in the Coverage Gap (receiving a 75 percent discount).
• For example: If you reach the 2021 Donut Hole, and your generic medication has a retail cost of $100, you will pay $25. The $25 that you spend will count toward your TrOOP or Donut Hole exit point.
• Lower costs when one comes out of the Donut Hole and enter Catastrophic coverage until December 31 and then a new year begins. Then the Medicare Part D cycle begins again with a new deductible on January 1 of every year.