October means more than just ghost and goblins. In fact, October can mean the start of something much scarier if you’re not prepared and informed. Every October 15th is the start of the Medicare Part D Annual Enrollment Period.

The Annual Enrollment Period occurs every year for seven weeks – from October 15th through December 7th. These seven weeks are the only opportunity Medicare Part D holders have the opportunity to shop for plans, change their plans, and to enroll in Part D benefits.

If you’ve recently found yourself in need of new medications or discontinuing some older ones this may be the perfect time to see what your options are.

Part D & The Donut Hole

Medicare Part D is the newest portion of Medicare. Starting in 2011, it was in response to the rising prices of prescriptions and sought to provide Medicare beneficiaries with another option for their health care. Medicare Part D is an optional part of Medicare that you have to opt-in to use.

Medicare Part D seeks to provide relief to beneficiaries by covering select prescriptions – up to a certain threshold. This threshold is known as the ‘donut hole’. Prior to 2011 once you hit a certain threshold in prescription benefits you were responsible for 100% of the cost, in the donut hole companies share the cost with you providing you a discount on your medication.

Medicare Part D has four parts: the initial deductible phase, the initial coverage phase, the coverage gap or donut hole, and the catastrophic coverage phase.

The Donut Hole is actually the third part or phase of your Medicare Part D prescription drug coverage and you only reach this phase when your drug spending exceeds a certain point.

New Rates in 2019

For 2019, if your medications have a total retail value of over $3,820 or you have retail drug costs of over $319 per month, you will enter the 2019 Donut Hole and receive a discount on your Medicare Part D prescriptions. Note that this doesn’t refer to how much you actually pay but the retail value of the medication.

Once you enter the donut hole you start to receive a discount on the name-brand and generic medications you purchase. In 2019 the discount on generic drugs is actually increasing from 52% to 63% per medication. The discount for name-brand medication is increasing to 75% of the retail value. As a result, you can plan to save more on your generic medication in 2019 if you reach the donut hole!

The Donut Hole – while sounding delicious – can be a bit hard to wrap your head around. As always if you have any questions reach out to your Personal Benefits Manager or contact us at 800-913-3416 to learn more about your options.

Wiley Long is founder and president of Medigap Advisors, and is passionate about helping people navigate the confusing waters of Medicare. He is the author of The Medicare Playbook: Designing Your Successful Health Coverage Strategy, a clear and simple explanation so you can make the most of your Medicare coverage.