What is the coverage gap in Medicare prescription drug coverage?

The coverage gap in Medicare prescription drug coverage refers to a temporary limitation on the amount of prescription medications that are covered by the plan after certain spending thresholds are reached. This gap occurs after the beneficiary and the plan have spent a specified amount on covered drugs, resulting in the beneficiary having to pay a higher percentage of costs until they reach the out-of-pocket maximum.

This temporary nature of the coverage gap is critical to understanding how Medicare Part D works. When beneficiaries enter the coverage gap, they may experience higher out-of-pocket costs for prescriptions compared to when they are in the initial coverage phase. It is important to note that the Affordable Care Act has been working to close this coverage gap over time by gradually reducing the percentage of costs that beneficiaries must pay during this phase.

Recognizing the temporary limit as opposed to a permanent or fixed aspect of coverage is key to understanding how Medicare Part D manages prescription drug expenses.