Changes to Medicare Part D “Donut Hole” in the 2018 Bipartisan Budget Act

The Part D donut hole is slowly closing under current law. The Bipartisan Budget Act speeds that up, but also makes fundamental changes to the Part D program that have wider, far reaching impacts for taxpayers and Medicare beneficiaries.

Currently, beneficiaries pay 35 percent of the cost of brand name drugs in the donut hole. Sec. 53116 of the Budget Act would accelerate the closing of the Part D donut hole. Beneficiaries would pay 25 percent of the negotiated price for a drug in the coverage gap for plan years starting in 2019.

But health plan risk decreases from 20 percent to 5 percent. The difference would be paid for by drug manufacturers.