You first need to understand Medicare and Part D. You pay out-of-pocket for monthly Part D premiums all year. You pay 100% of your drug costs until you reach the $310.00 deductible amount. After reaching the deductible, you pay 25% of the cost of your drugs, while the Part D plan pays the rest, until the total you and your plan spend on your drugs reaches $2970.00. Once you reach this limit, you have hit the coverage gap referred to as the “donut hole,” and you are now responsible for the full cost of your drugs until the total you have spent for your drugs reaches the yearly out-of-pocket spending limit of $4,550. After this yearly spending limit, you are only responsible for a small amount of the cost, usually 5% of the cost of your drugs.