Healthcare Policy Expert, Robin Scott, is a contributing blogger for Protestants for the Common Good.
You have probably heard about the dreaded donut hole. That refers to a problem that affects people
receiving Medicare health coverage, even those who have also enrolled in
Medicare Part D Prescription Drug Plans.
As everyone knows, prescription medicines are expensive, especially if
you have a chronic illness. I have heard
stories of people skipping doses, sharing medicine with spouses, and skipping
medicine altogether because of price.
For Medicare beneficiaries, you have the option of
purchasing a Medicare Part D Prescription Drug Plan. Initially, you may have to pay a deductible
of a little more than $300 and an average of 25% of the cost of your medication
until you reach the $2,930 drug coverage limit. (The dollar amount to reach the
$2,930 coverage limit includes what you pay and what the plan pays.) Then you hit
a coverage gap or donut hole where the costs of your co-payments increase until
you reach catastrophic coverage. Then
you pay 5% or $2.60 for generics and $6.50 for brand-names whichever is
greater.
Before health reform (or the Affordable Care Act), you would
have had to pay 100% of out-of-pocket costs before getting out of the donut hole.
(The donut hole for 2012 was $2,930 to $6,658.) See illustrations for 2012 and
2013 respectively at: http://familiesusa2.org/assets/pdfs/medicare-part-d/Prescription-Drug-Benefit-Illustration-2012.pdf
and http://familiesusa2.org/assets/pdfs/medicare-part-d/Prescription-Drug-Benefit-Illustration-2013.pdf. Not
surprisingly, it was difficult for people to pay the costs of medicine during
the donut hole so many of them never even reached catastrophic drug coverage. Some beneficiaries stopped filling their
prescriptions and others never reached the dollar amount in drugs to get out of
the donut hole.
But thanks to health reform, in 2012, beneficiaries receive
an automatic 50% discount on brand-name drugs and 14% discount on generics
while in the donut hole. The brand name and generic drug discounts gradually
increase every year until 2020 when the donut hole is phased out. Then you will once again pay an average of 25%
of the cost of your medication until you reach catastrophic coverage.
In the first four months of 2012 alone, more than 416,000
people have saved $301.5 million – an average of $724 a person so far this
year. The
Affordable Care Act was helping them even before that. After the Affordable Care Act passed in 2010,
those who hit the donut hole received a $250 rebate – with almost 4 million
seniors and people with disabilities receiving a collective $1 billion. In 2011, Medicare beneficiaries received more
than $2.1 billion in savings – averaging $604 per person last year – from the
50% discount on brand-name drugs in the donut hole. http://www.healthcare.gov/blog/2012/05/medicare052412.html
(There was also a 7% subsidy for generic drugs purchased in the donut hole in
2011.)
For Medicare beneficiaries, it is the Annual Open Enrollment
period for 2013. It started October 15
and ends on December 7. If you already
have a Part D plan, you should check to make sure that your current plans
continues to work for you in 2013 (for example, make sure that all drugs that
you take are on the formulary and check premiums and co-payments and
co-insurance). General information about
Medicare Part D Prescription Drug Coverage can be found at: http://www.medicare.gov/part-d/index.html
·
(This blog does not refer to people who get
“extra help” or the low-income subsidy.)
