OBJECTIVES: To examine the association between drug coverage during the Medicare Part D coverage gap and medication cost-cutting behaviors of beneficiaries with diabetes mellitus who use and do not use insulin. DESIGN: The study was cross-sectional. SETTING: A network-model health system. PARTICIPANTS: 2007 survey of Medicare Advantage Part D (MAPD) and Prescription Drug Plan (PDP) beneficiaries who entered the gap by October 2006 (N=1,468, 57% response rate). MEASUREMENTS: The primary predictor variable was no gap coverage versus generic-only gap coverage. Seven cost-cutting behaviors were examined as dependent variables, including cost-related nonadherence (CRN) to any medication. Covariates included race or ethnicity, education, health status, income, and comorbidities, as well as generic medication use in the first quarter. Logistic regression models were constructed using nonresponse weights to generate predicted percentages. RESULTS: In multivariate analyses, beneficiaries taking insulin were less likely to report CRN if they had generic-only gap coverage than if they had no gap coverage (16% vs 29%, P=.03). No differences in CRN according to type of gap coverage were seen between beneficiaries not taking insulin. CONCLUSION: Medicare beneficiaries using insulin are at high risk of CRN. Generic-only coverage during the gap is associated with an attenuated risk of CRN in insulin users, possibly because of savings on other, generic medications. Future research should evaluate CRN within alternative benefit designs covering selected brand name medications, such as insulin, during the gap.