Let us suppose that we fill a prescription at the Local Pharmacy for which our Insurance Plan has negotiated a price of $40.00 for a 90 day supply of a drug and our Co- pay amount is $12.00 ( $4.00 per month Co-pay x three months ).
In this case we would pay $12.00 when we pick up the prescription and our Plan would pay the balance of $28.00 to the pharmacy.
The ENTIRE $40.00 would then be charged to our accumulating " Total Drug Costs ".
This really does not seem fair - since our Insurance Plan has only paid out $28.00 on our behalf.
Once this " Total Drug Cost " reaches a certain amount ( $2830.00 for 2010 ) we are now responsible for the total amount - ( $12.00 + $28.00 =$40.00 ).
Once we become responsible for the total amount, we are in " The Medicare Gap " also known as " The Medicare Part D Donut Hole ".