HC Reform Update from Mark Sanna: By 2020, the new health law will close the “doughnut hole,” that gap in Medicare Part D prescription drug coverage during which beneficiaries are responsible for paying 100 percent of their costs. In 2010, the doughnut hole generally occurs when total drug costs are between $2,830 and $6,440. Once spending surpasses that amount, catastrophic coverage kicks in and beneficiaries pay 5 percent of the cost.