deductible for initial drug costs During initial coverage phase, insured pays a copayment or coinsurance…Insured’s Part D plan pays the rest up until your combined amount hits $2970 Once insured hits $2970, they then enter what is known as the “donut hole” where they are responsible for covering 47.5% of named-brand prescription drug costs and 79% for generic prescription drugs. Once out-of-pocket expenses hit $4,750 the insured enters the “catastrophic coverage” period in which all prescription drug costs are covered by their medicare plan.