About $2,148.30 - maybe even a little more depending on your Medicare Part D plan.
Your actual savings in the 2015 Donut Hole will depend on several things including:
- your Medicare Part D
plan’s cost-sharing structure,
- how much you have spent before entering the
Donut Hole, and
- whether you purchase generic or brand-name medications while in
the Donut Hole (generic drugs receive a 35% discount and brand-name drugs
receive a 55% discount -- this is because you get credit for 95% of the brand-name drug purchase costs toward meeting your 2015 out-of-pocket threshold limit (or TrOOP) of $4,700. The 95% includes the 50% discount paid by the brand-name drug manufacturer and the 45% paid by you. The 5% discount paid by your Medicare Part D plan does not count toward TrOOP.)
Here are our calculations and a few assumptions:
- Your 2015 Medicare Part D Initial Deductible: $320.
- The standard 2015 Initial Coverage Limit: $2,960 (or the total retail drug cost).
- You have a 25% cost-sharing (this means that you pay 25% of the retail cost for a medication and the plan pays the other 75%) - so, of the $2,960, you pay $660.00 during the Initial Coverage phase (.25 x ($2,960 - $320)) .
- The remaining balance you need to reach the 2015 Donut Hole exit point or TrOOP threshold of $4,700 is $3,720.00 ($4,700 - $660.00 - $320).
- If you purchase $3,720 in brand-name drugs while in the
Donut Hole you get the 55% Donut Hole discount on your purchases, so
you pay $1,674 (45% of $3,720) -- but you only get credit
for $3,534 toward meeting the $4,700 TrOOP threshold or Donut Hole
exit point (not the full $3,720). Since you only get credit for 95% of your brand-name
prescription purchases while in the Donut Hole, you calculate your new
Donut Hole exit point by dividing the coverage gap spending amount
($3,720) by .95 for a total of $3,915.79. Or you can look at it as
-- you actually have to buy $186.00 more in medications to meet TrOOP in order to
account for the discount paid by your plan (because you do not get
credit toward TrOOP for the amount paid by your plan).
So your estimated savings is then
$2,148.30 or ($3,720 + $186.00 = $3915.79) x 55%.
If you had a Medicare Part D $0 Initial Deductible, your savings would be $2,292.63 or $138.95 more in savings as compared to a Medicare Part D plan with the standard $320 Initial Deductible.
Please note: If you select a 2015 Medicare Part D plan that has an average cost-sharing structure of lower than 25% (you pay less than $25 for a $100 drug purchase), you will save even more money with the 2015 Donut Hole discount when you reach the Donut Hole or Coverage Gap, because you will have more of your total out-of-pocket costs falling into the 2015 Donut Hole where you get the 55% name-brand Donut Hole discount.
For more information, you can
click here to see how the Donut Hole discount increases over the next few years until the discount reaches 75% and the Donut Hole is considered “closed”.
See our FAQ for examples of the maximum
Donut Hole Discount savings for other plan years.
Our
2015 PDP-Planner (or Donut Hole Calculator) is available to illustrate your monthly estimated costs for 2015. Several examples are available to help you get started.
Click here for an example of a Medicare beneficiary with relatively high monthly prescription drug costs (a retail drug cost of $800 per month).