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Gap In Medicare Coverage Hitting Seniors Enrolled in Part D - What Happened?  Donut Hole Hits Drug Plan Recipients with Extra Costs

July 31st 2006

Gap In Medicare Coverage Hitting Seniors Enrolled in Part D - What Happened?  Donut Hole Hits Drug Plan Recipients with Extra Costs

Donut Hole

Some Medicare patients are left paying large sums of money because of a gap in Medicare coverage called the “doughnut hole”.  Once a patient reaches a threshold in prescription drug expenditures they are responsible for 100 percent of the cost.  This threshold is reached between $2,250 and $5,100 of the total drugs cost (not the out of pocket expense).  After the drug costs reach $5,100, Medicare will pay 95 percent of the expenses.    

Many Medicare beneficiaries were unaware of this doughnut hole according to a report by the Baltimore Sun.  Even if patients are aware of the doughnut hole, many of them are only keeping track of their out-of-pocket expenses and not the total cost of the drugs.  The donut hole is reached when the total cost of the drugs reaches $2,250, not when the recipients out of pocket expense reach $2,250.  Read below for more.   

 

After the total cost of the drugs used by the patient reaches $2,250, the recipient is completely responsible for the cost of the drugs.  Now you, the recipient, is responsible for 100 percent of your drug coverage until the total cost of the drugs reaches $5,100.  After that, Medicare will pick-up 95 percent of the bill.  This means you could end up paying $2,650 ($5,100 - $2,250) inside the donut hole.

The New York Times reports that many beneficiaries are upset about this. When the program first started, few people were concerned because the donut-hole threshold was not reached by anyone.  But now, midyear, some patients are feeling the pinch.

 

Some advocacy groups have complained about the Medicare Part D program.  They claimed it was created to benefit drug and insurance companies.  Before Part D, many recipients were purchasing their drugs from Canadian pharmacies at a discounted rate. 

Under Medicare Part D, the drug companies are able to charge full price.  The Federal government (i.e. the taxpayers) picks up the difference.  There is a small out of pocket expense for the recipient until the donut hole is reached.  Everyone seems to be happy with the program except anti-tax groups and recipients who fall into the donut hole. 

 
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Dan Wilson
Best Syndication

 Health Insurance
 

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Important:  The material on Best Syndication is for informational purposes only and is not a substitute for medical advice or treatment for any medical conditions. You should promptly seek professional medical care if you have any concern about your health, and you should always consult your physician before starting a fitness program.
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Copyright 2005 Best Syndication                   Last Updated Saturday, July 10, 2010 09:51 PM