Medicare Donut Hole

The Part D Coverage Gap and Your Health

The Medicare donut hole refers to the gap between where Medicare stops paying for prescription drug benefits and the maximum out of pocket limit where they will start paying again. The Medicare Part D donut hole has significant health impacts on the elderly.

Unfortunately, the US government does not make anything simple, clear or easy to understand. The Medicare donut hole does not mean coffee break and donuts.

In fact, it doesn't mean anything good to people who depend on Medicare to cover their prescription drug costs.

Medicare Part D covers prescription drug costs for our elderly and disabled that are on Medicare coverage. But it doesn't cover all of the costs.

Here is a breakdown of the Medicare Part D coverage, including the donut hole period, for the year 2011. There are changes almost yearly to this plan, so knowing what your expenses will be each year can help you plan your financial future.

    Medicare Donut Hole 2011

  • You will pay the initial $310.00 of your prescription medication costs. This is considered your deductible.
  • After you reach $310.00 in out of pocket expenses, you will pay 25% of your drug cost up to an out of pocket limit of $2840.00. Medicare pays 75% during this time.
  • Once you have reached the $2840.00, you will officially be in the donut hole and responsible for 100% of your drug costs up to a total of $4550.00. However, beginning in 2011, you will receive a 50% discount on brand name drugs and a 7% discount on generic drugs.
  • After you have spent a total of $4550.00, Medicare will then pick up 95% of your medication costs and you will pay only 5%.

The discounts you receive during the Medicare donut hole will gradually increase until 2020, when the maximum you will pay during the donut hole is twenty five percent.

The fundamental idea behind the donut hole was to make participants more aware of prescription drug costs and once they had to bear 100% of the financial burden of their medications, it was believed that they would voluntarily switch to generic or less expensive options, saving costs for both them and the government sponsored plans.

But studies have found that, instead of switching to generic or less costly options, up to half of our elderly simply stop taking their medications altogether.

Many of our elderly in the United States depend on Social Security Income and Medicare to cover their living and health related expenses in their retirement years. That leads to serious health risks when the donut hole period is reached.

Research has also shown that up to two-thirds reach the Medicare donut hole within seven months. Most pharmaceutical companies are not willing to help people who are in the donut hole coverage period. In addition, many medications that are prescribed do not have a generic equivalent or less expensive option.

Preparing for the Medicare Donut Hole

The best thing you can do is to prepare before you hit the coverage gap, not once you are in it and can't afford your medications. Here are a few things you can do to assure that you have the funds necessary to pay for your medications.

  • Talk to your doctor ahead of time: There may be generic equivalents that can save you money in the long run
  • Review your medications: Do you really need to be on everything you are currently prescribed? Sometimes prescriptions build up and physicians forget to review if the medication is still needed. Review your medications with your physician at least once a year, preferably every six months.
  • Ask for samples: If you are in the donut hole and can't afford your medications, your physician may have sample medications they can give you for free. But most times, you will have to ask.
  • Review dosages of medications: It may sometimes be cheaper, if you are prescribed 0.5mg daily of a medications, to have your physician write the prescription as 1/2 of a 1 mg tablet, thus reducing your cost per pill.
  • Talk to your pharmacists: They are very educated in the Medicare Part D coverage plans and can sit down with you and review current medications, make suggestions for changes or generics you can then take to your doctor.
  • Look for discounts: Walmart has a $4 dollar list that covers many common medications. Print the list and have it with you during every doctor's appointment. Most doctors are willing to attempt to prescribe from the list, but they may not be aware of everything on the list.
  • Talk to any home care agency you may have: They should have someone who is well aware of what is covered and not and can help you chose the best coverage plan for your current medications
  • Consider 3 month mail orders: These companies will supply you with three months of medications, delivered to your home, often at a discount over traditional pharmacies.
  • Look to Canada: Please talk to your doctor ahead of time and do your own research, but there are several Canadian mail order, on line pharmacies that can fill your prescriptions, sometimes at up to a 40-50% discount.
  • State and Local Charities: Many states and communities have charitable organizations set up to assist seniors in meeting their prescription medication costs.

Preparing for the Medicare donut hole requires that you stay up to date on all pending changes and current regulations. The best thing you can do is attempt to lower your medication costs prior to hitting the donut hole altogether.

Medicaid and several extra help programs through Medicare may be available to you if you meet certain income requirements and qualifying factors. Review the guidelines at Medicare.Gov.

The future of Medicare is uncertain at this time and many of the changes that are helping seniors are a part of the Affordable Health Care Reform Act of 2010.

If the law ends up being partially, or completely, either repealed or deemed unconstitutional, Congress will need to go back to the drawing board on these issues.

The best thing you can do is to find every avenue you can do decrease your prescription costs.

Do not stop taking prescribed medications unless your physician is in agreement.

Serious health related consequences could occur.

Only your physician can help you determine what is absolutely necessary and what may be able to be decreased or eliminated during the donut hole coverage gap.

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