In Part D, what is the 'donut hole' and when does catastrophic coverage begin?

• A. The donut hole is a temporary discount period within the coverage year.
• B. The donut hole is a cap on out-of-pocket costs.
• C. Catastrophic coverage starts at the start of the year.
• D. The donut hole is a gap in coverage where costs rise; catastrophic coverage begins after meeting TrOOP.

Answer: (D)

In Medicare Part D, your year of drug coverage is split into phases, and the donut hole is the gap where costs rise after you hit the initial coverage limit. It’s not a discount period or a cap; it’s a temporary gap during which you pay a larger share of drug costs. Catastrophic coverage then kicks in once your true out-of-pocket costs for the year—TrOOP—reach a set threshold. After that, you pay only a small copay or coinsurance for covered drugs for the rest of the year, and the plan covers most of the cost. TrOOP includes what you pay in deductibles, copays, and coinsurance for drugs, and amounts paid in the donut hole (including manufacturer discounts), but excludes monthly premiums.