The coverage gap is the stage in the Medicare Part D prescription drug cycle when your Peoples Health patients must pay some or all of the costs for their prescription drugs.
The coverage gap, also called the “doughnut hole,” begins after plan members and their plans have spent a certain amount of money for covered drugs. There are four stages in the prescription drug cycle:
Stage 1 (Yearly Deductible Stage): There is no deductible for Peoples Health plans, so this stage does not apply to Peoples Health patients.
Stage 2 (Initial Coverage Stage): During this stage, the member pays standard plan cost-sharing and the plan pays the remainder of the cost for each covered drug until the total combined drug costs reach a Medicare-defined amount (reference a plan’s Evidence of Coverage for the amount).
Stage 3 (Coverage Gap Stage): During this stage, the member is considered to be in the coverage gap and must pay the full costs for many or all drugs (generic drugs in tiers 1 and 2 of the Peoples Health formulary are covered through the coverage gap for all Peoples Health plans). The coverage gap does not end until the member (and others on the member’s behalf) spends a total Medicare-defined amount (reference a plan’s Evidence of Coverage for the amount). The amount includes costs paid in stage 1.
Stage 4 (Catastrophic Coverage Stage): This final stage begins after the member’s expenses have exceeded the Medicare-defined amount for stage 3. The plan then pays most or all of the costs for covered drugs, and the member pays reduced costs (reference a plan’s Evidence of Coverage for the amount).
The prescription drug cycle starts over again on Jan. 1 of every year.