With all my blogging about diets, you may be wondering if this is some kind of eating binge blog, but alas, it’s not. Today, I am tackling a meatier topic –the Medicare Donut Hole. I think this is such a weird name for it, but I will explain and you can decide. The way this works is that when you get your prescription drugs covered by Medicare, you only pay your copay up to your $310 deductible. Your Part D drug coverage pays the rest up to $2840 (including your $310). Once you hit this $2840, life is no longer sweet sorta-speak, and you drop into the donut hole. At this point, you fell into the coverage gap and now pay for your prescription drugs. The good news is that, with healthcare reform Obama signed in March 2010, you don’t pay 100%, you pay 50%. For some, that is little consolation, but it’s better than nothing. Now, when your out of pocket costs hit $4550, catastrophic coverage kicks in, and you made it back to the other sweet side of the donut, and Medicare pays for your drugs. Wow, that’s a lot.
It gets more interesting in that you still pay your premium for this Part D coverage. The above is the standard Medicare plan, but your plan through your insurance can differ from this and offer more benefits to be competitive in the local market, so for example, they may pay for brand or generic brands while in the coverage gap. Medicare also issued more discounts for drugs to help offset the costs. By 2020, the donut hole gap will change – still be there- but what happens is you will only be required to pay 25%.
In the meantime, try to order 3-month supplies of drugs you use routinely – it’s cheaper than over the counter monthly refills. Pharmaceutical companies offer assistance programs for those in need, as do local charities and various state programs. There are insurance plans that help offset the cost of the coverage gaps, but you will pay more in monthly premiums. If you can switch to generic, try to do it.
I haven’t seen any recent studies on how many people fall through the donut hole, but I recall a Kaiser study from back in 2007 that said its roughly 4 million people, usually people with chronic diseases, and they hit the donut hole mid-year. Further, many people stop taking their medications because they cannot afford them.
The coverage gap places financial burden on patients, many of which do not fully understand all their benefits. Sometimes I think you have to be a Philadelphia lawyer to read through all of evidence of coverage language. Most people “get it” when they get a bill from Medicare telling them it’s time to pay. The best recommendation is to plan ahead, do your best to understand your coverage plan, determine if you need a Plan D coverage with wider benefits to cover the donut hole. Also, investigate generic brands and talk with your doctor’s office and other providers on any programs they may know of and can recommend to help offset the costs.
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