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The Medicare Part D coverage gap (informally known as the Medicare donut hole) was a period of consumer payments for prescription medication costs that lay between the initial coverage limit and the catastrophic coverage threshold when the consumer was a member of a Medicare Part D prescription-drug program administered by the United States federal government. The gap was reached after a shared insurer payment - consumer payment for all covered prescription drugs reached a government-set amount, and was left only after the consumer had paid full, unshared costs of an additional amount for the same prescriptions. Upon entering the gap, the prescription payments to date were re-set to $0 and continued until the maximum amount of the gap was reached or the then current annual period lapses. In calculating whether the maximum amount of gap had been reached, the "True-out-of-pocket" costs (TrOOP) were added together.
A health insurance company provided this explanation about TrOOP:
"TrOOP includes the amount of your Initial Deductible (if any) and your co-payments or co-insurance during the Initial Coverage stage. While the Donut Hole includes what you pay when you fill a prescription and of the 75% Donut Hole discount on brand-name drugs, it includes the 70% Donut Hole Discount paid by the drug manufacturer. The additional 5% Donut Hole discount on brand-name drugs and the 75% Donut Hole discount on generics do not count toward TrOOP as they are paid by your Medicare Part D plan."[1]
TrOOP also included payments made for a consumer's drugs by any of the following programs or organizations: "Extra Help" from Medicare; Indian Health Service; AIDS drug assistance programs; most charities; and most State Pharmaceutical Assistance Programs (SPAPs).
Provisions of the Patient Protection and Affordable Care Act of 2010 gradually phased out the coverage gap, eliminating it in 2020.[2]: 1
- ^ "What is TrOOP or True Out-Of-Pocket Costs". Q1Medicare.com. Q1Group LLC. Archived from the original on October 31, 2020. Retrieved February 1, 2021.
- ^ Centers for Medicare and Medicaid Services (January 2015). "Closing the Coverage Gap—Medicare Prescription Drugs Are Becoming More Affordable" (PDF). Medicare.gov. U.S. Department of Health and Human Services. Archived from the original (PDF) on February 21, 2015.