Tuesday, September 7, 2010

Closing the Medicare Drug Donut Hole

For most Medicare beneficiaries, the Medicare Part D prescription drug benefit has significant limitations. They begin with a $310 deductible. In 2010, after the beneficiary has spent $310, he pays 25 percent of the cost of prescriptions until the total cost of all the covered medicine hits $2,830. At that point, the beneficiary hits what is known as the donut hole and is stuck with 100 percent of drug costs until he reaches the catastrophic threshold of $6,440. In 2010 this donut hole coverage gap totals $3,610 in drug costs that have to be paid solely by the beneficiary. Without reform, congressional estimates projected the gap would have risen from $3,610 this year to $6,000 by 2019.

Health Reform (The Affordable Care Act: http://docs.house.gov/energycommerce/ppacacon.pdf) phases in the elimination of the donut hole. This year enrollees who hit the donut hole will receive a $250 rebate from the government. The rebate checks started going out in June and will continue to be sent out on a rolling basis over the remainder of the year to people who hit the coverage gap.

Low income Medicare beneficiaries who get “extra help” through the low income subsidy program and are not subject to the donut hole will not receive a rebate check. However, PACE/PACNET members are eligible for rebates so long as they don’t receive a low income subsidy.

This year’s $250 rebate is only the first step toward closing the Medicare prescription drug coverage gap. Discounts and partial donut hole coverage will be phased in beginning in 2011, and by 2020, the donut hole will be gone.

What you need to know is that this year’s rebate checks will be automatically mailed to them. There is no application process and no private company can be involved in getting you your rebate check. If anyone tries to charge you for help in getting your rebate, it is a scam.

For more information visit:
-Tips and Tools for People with Medicare and those who care for them
-Closing the Prescription Drug Coverage Gap

No comments: