A number of visitors to www. HealthCare.gov have told us they’d like to know more about the Medicare “donut hole” in the Part D program.
If you aren’t familiar with Medicare, it is a health insurance program for people 65 or older, people under 65 with certain disabilities, and people with End-Stage Renal Disease (permanent kidney failure). People with Medicare have the option of paying a monthly premium for outpatient prescription drug coverage. This prescription drug coverage is called Medicare Part D.
In 2010, basic Medicare Part D coverage works like this:
You pay out-of-pocket for monthly Part D premiums all year.
You pay 100% of your drug costs until you reach the $310 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 $2,800.
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.
You may have read in the 2010 Medicare & You Handbook that there are some Medicare Part D plans that offer coverage in the donut hole—but these plans may charge a higher monthly premium. (There are also some Part D plans that are “enhanced” and offer ﬁxed co-pays (for example $5, $10, and $20) for prescription drugs instead of the deductible and 25% cost-sharing that was described above. These plans also may charge a higher monthly premium.)
For those that qualify, there is also a program called Medicare Extra Help that helps you pay your premiums and have reduced or no out-of-pocket costs for your drugs.
Needless to say, for most people with Medicare Part D, the donut hole presents serious ﬁnancial challenges. Some people have had to choose between their rent or groceries and their prescription drugs.
But, the recent health reform law – the Affordable Care Act – has some important changes that will help to relieve this burden for the people with Medicare that hit the donut hole each year (and are not already on a program called Medicare Extra Help,):
This year, if you enter the Part D donut hole, you will receive a one-time, $250 rebate check. The mailing of these checks began in June. If you are eligible and do not receive your check, call your Part D plan ﬁrst and the 1 800 MEDICARE Centers for Medicare and Medicaid Services
Turning 65? Confused about Medicare? Please Contact: Jane Reese-Wilkins for your no cost obligation Plan Review. 626 372 9097 email@example.com