Final answer:
The coverage gap, or 'donut hole,' in a Medicare Part D plan refers to the period where beneficiaries pay a higher share for prescription drugs. Beneficiaries now receive discounts when in the gap—75% on both generic and brand-name drugs—until they reach catastrophic coverage, at which point Medicare covers 95% of drug costs.
Step-by-step explanation:
The question addresses the coverage gap in a Medicare Part D prescription drug plan, also known as the 'donut hole.' This gap is the period during which individuals may have to pay a higher share of their prescription drug costs out-of-pocket until they reach the threshold for catastrophic coverage.
Under the standard Part D benefit, once a beneficiary and the plan have spent a certain amount on covered drugs, the beneficiary enters the coverage gap. During this gap, they previously paid a larger percentage of the cost of drugs. However, due to changes in recent years, beneficiaries now receive substantial discounts while in the coverage gap: 75% on generic drugs and 75% on brand-name drugs. After spending enough out-of-pocket to reach the catastrophic coverage threshold, Medicare covers 95% of drug costs.
It's important to note that the actual percentages and figures may vary slightly based on legislative changes and the specifics of an individual's Medicare plan.