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Medicare Prescription Drug Donut Hole:
Most plans with Medicare prescription drug coverage (Part D) have a coverage gap (called a "donut hole"). This means that after you and your drug plan have spent a certain amount of money for covered drugs, you have to pay all costs out-of-pocket for your prescriptions up to a yearly limit.
Once you have spent up to the yearly limit, your coverage gap ends and your drug plan helps pay for covered drugs again.
Health Insurance Vocab – Medicare Drug Donut Hole