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The Medicare coverage gap – explained and simplified

You may have heard about the “donut hole” or coverage gap. It's a phase of your Rx coverage where you may need to pay more for meds. (It’s a Medicare thing, not an Oscar thing.) And not everyone will experience it.
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Medicare Part D and what it looks like

All Medicare Advantage plans with Rx coverage have four stages with a different out-of-pocket cost to you.

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Phase 1

You cover full costs until deductible is met

This means you pay up to a specified amount (deductible) for your meds. Your deductible resets every year on January 1st.

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Phase 2

Initial coverage begins

You pay set copays for your meds and your Medicare Advantage plan covers the rest. This stage ends when the member and Oscar pay up to $4,660.

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Phase 3

Then, you’ll enter the coverage gap

You’ll pay more for your meds, about 25% of the cost of the drug – until your out-of-pocket drug cost reaches $7,400. Not everyone enters this phase.

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Phase 4

You’ll enter catastrophic coverage

In this phase, you’ll pay $4.15 for generics, $10.35 for Brands, or 5% – whichever is greater.  You’ll stay in this phase until your plan renews on January 1st.

How do you get into the coverage gap?

When you and your Medicare Advantage plan pay a certain price maximum for your meds – you enter the gap. Here’s how it works: if a drug costs $100, you may only pay a $10 copay, while your plan covers the remaining $90. But the $100 cost counts towards the initial coverage stage limit. When your costs reach a certain amount, you’ll enter the coverage gap. This year that amount is $4,660.
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So, how can you stay out of or delay entering the coverage gap?

Fill differently

Opt for mail delivery and/or 90 or 100 day supplies. By getting more at once, you can potentially lower the cost that contributes to your coverage limit.

Apply for programs to help you save

A program like Extra Help is a great way to get support in paying for your meds. Oscar partners with Uno Health to make applying for this program – and many others – easy. And they’ll do the paperwork for you. Just ask your Care Team to help connect you.

Switch to lower cost meds

You can do this by working with your doctor to switch from a brand med to a generic version. Or you can see if there’s an option for switching to a lower tier med.
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Footnotes
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I’m in the coverage gap, how do I get out?

Getting out of the coverage gap requires reaching a certain total out-of-pocket amount for your meds – this year that amount is $7,400 total. When you reach that amount you enter the Catastrophic phase and you’ll pay $4.15 for generics, $10.35 for Brands, or 5% – whichever is greater. You’ll stay in this phase until your plan renews on January 1st.