Homonym: Doughnut Hole (Pastry)
The "Doughnut Hole" refers to a coverage gap in the Medicare Part D prescription drug benefit. After beneficiaries reach a certain spending limit on medications, they enter this gap where they must pay a higher percentage of their drug costs out-of-pocket until they reach a catastrophic coverage threshold.
During the Doughnut Hole, beneficiaries may face significant financial burdens, as their out-of-pocket expenses can increase dramatically. However, recent legislation has aimed to gradually close this gap, reducing costs for seniors and individuals with disabilities who rely on Medicare for their prescription medications.