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Not Low Enough: Medicare Part D ‘Donut Hole’ Prices Compared with Retail and VA Prices

Medicare’s’ new prescription drug program, Part D, relies on private insurance plans to deliver benefits. A standard Medicare Part D plan covers most of a beneficiary’s drug costs until their spending reaches what is known as the “coverage gap” or “donut hole.” At that point, although the beneficiary continues to pay premiums, a standard Medicare Part D plan does not cover any drug costs for the beneficiary until the beneficiary spends another $2,850 of his or her own money . Estimates of the number of people who will hit the coverage gap this year vary widely, from less than 3 million to nearly 7 million.