Prescription Drug Plan Donut Hole/Gap

 

The Medicare Prescription Drug Plans has a coverage gap (also called the “donut hole”). This means there’s a temporary limit on what the drug plan will cover for drugs.

Not everyone will enter the coverage gap. The coverage gap begins after you and your drug plan have spent a certain amount for covered drugs.

Coverage Begins Jan. 1
Select Drug Plan based on medications
You will pay co-pays and Deductibles according to plan you select
The use of Generics are important

                                Once your costs reach $4850 you then go into the donut hole
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Coverage Gap begin
HOLE        during this time yours costs increase but once your Total Drug costs reach  $37o0

                                      You get out of this hole and move to the Catastrophic
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Now the Catastrophic Coverage begins
Catastrophic Covers 95% of your drug cost
Coverage ends December 31
Begins again January 1st every year

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The following is an overview for 2017,

  • Initial Deductible:
    will be increased by $40 to $400 in 2017.
  • Initial Coverage Limit:
    will increase from $3,310 in 2016 to $3,700 in 2017.
  • Out-of-Pocket Threshold:
    will increase from $4,850 in 2016 to $4,950 in 2017.
  • Coverage Gap (donut hole):
    begins once you reach your Medicare Part D plan’s initial coverage limit ($3,700 in 2017) and ends when you spend a total of $4,950 in 2017.
    In 2017, Part D enrollees will receive a 60% discount on the total cost of their brand-name drugs purchased while in the donut hole. The 50% discount paid by the brand-name drug manufacturer will apply to getting out of the donut hole, however the additional 10% paid by your Medicare Part D plan will not count toward your TrOOP (TRue Out Of Pocket).
  • Minimum Cost-sharing in the Catastrophic Coverage Portion of the Benefit**:
    will increase to greater of 5% or $3.30 for generic or preferred drug that is a multi-source drug and the greater of 5% or $8.25 for all other drugs in 2017.
  • Maximum Co-payments below the Out-of-Pocket Threshold for certain Low Income Full Subsidy Eligible Enrollees:
    will increase to $3.30 for generic or preferred drug that is a multi-source drug and $8.25 for all other drugs in 2017.
  • Difference between inpatient and Outpatient Services: Medigap plans help to pay for inpatient and outpatient services only. Drugs fall separately under Part D.

                                                               

Tracking your spending for Prescriptions

Your Part D prescription statement, or explanation of benefits (called an EOB), each month. This statement tells you exactly how much you have already spent on covered medications and how many dollars are left before you reach the coverage gap. Likewise, after you reach the gap, your insurance company will continue to send you notices that track your gap spending. They will calculate how many dollars are left before you reach catastrophic coverage.

If you think you’ve reached the coverage gap and you don’t get a discount when you pay for your brand-name prescription, review your next Explanation of Benefits (EOB)

The discount doesn’t appear on the EOB, contact your drug plan to make sure that your prescription records are correct and up-to-date.

 

Need Extra Help

If you meet certain income and resource limits, you may qualify for extra help  from Medicare to pay the costs of Medicare prescription drug coverage.In 2016, costs are no more than $2.95 for each generic/$7.40 for each brand-name covered drug.

Other people pay only a portion of their Medicare drug plan premiums and deductibles based on their income level.

In 2016, you may qualify if you have up to $17,820 in yearly income ($24,030 for a married couple) and up to $13,640 in resources ($27,250 for a married couple).

 

 

If you don’t qualify for Extra Help, your state may have programs that can help pay your prescription drug costs. Contact your Medicaid office or your State Health Insurance Assistance for more information. You can reapply for Extra Help at any time if your income and resources change.

 

 

The Good News!

The good news is that the Affordable Care Act signed into law on March 23, 2010 makes several changes to Medicare Part D to reduce your out-of-pocket costs when you reach the donut hole.  And by 2020, the government is expected to close the gap with a flat cost of 25% of the drug costs with no gap.  While not all seniors will reach the gap, this is a good step forward to reducing drug costs for those that need it the most.

Ways to Keep your Costs under Control

  • Talk with your physician about lower-cost alternative medications that may exist to treat the same condition. Even if your current medication does not have a generic equivalent, there may be other medications that treat the same condition that are less costly.
  • Use your drug plan’s mail order service. Drugs purchased through mail order often have lower total costs than drugs bought at a retail pharmacy. This means the amount applied toward your Part D initial coverage limit is lowered. Some carriers offer medications as low as $0 for generics when ordered through the insurance company’s mail order program.
  • Fill your prescriptions at preferred pharmacies. Some Part D drug plans have both preferred and and standard pharmacies. All of the pharmacies are in the plan’s network, but your costs at preferred pharmacies will be lower, sometimes considerably lower.
  • Research pharmaceutical assistance programs. Both the drug manufacturers and your state assistance programs may offer help for certain expensive medications. There are also charitable organizations like the National Patient Advocate Foundation, that may be able to help. You can apply for this assistance to see if you qualify to be given the drug at a much lower copay. Qualifications are often based on your income.
  • Take advantage of your pharmacy’s own drug program. Certain pharmacies, such as Wal-mart, have lists of generic medications that you can purchase without insurance for only $4. Buying these medications outside of your drug plan means they won’t count toward your Medicare Donut Hole. Get into the habit of asking your pharmacist to tell you the cheapest way available to you to fill each medication.
  • Veterans Association.If you served, you may qualify for inexpensive medications through your local VA hospital or clinic. Contact the VA to find out.
  • Apply for the Low Income Subsidy.Medicare has savings programs that can help you with your drug costs. The Low Income Subsidy can reduce your premiums and eliminate your deductible and coverage gap if you qualify. Contact Social Security at 1-800-772-1213 for an application.