- Health Care, Drugs & Insurance
Medicare Part D Donut Hole 2010: Coverage Gap Will Disappear for Seniors by 2020
New - Update - Historic Health Reform Bill Passed on March 21, 2010
The $940 billion U.S. Health Reform Bill was passed by the House of Representatives on Monday, March 21, 2010, and was signed into law by President Barack Obama by the end of that month. Whether or not you supported its passing, it will affect the doughnut hole in the Medicare Part D Prescription Drug Plan in many ways.
The law has been renamed the Patient Protection and Affordable Care Act (PPACA) (signed into law March 23) and the Health Care and Education Reconciliation Act of 2010 (signed into law March 30).
The Medicare Part D prescription drug plan for 2010 still has the dreaded "donut hole," the coverage gap that will affect 1.1 million seniors this year, seniors who will find themselves forced to pay out of pocket the full drug cost. In 2010, the coverage gap is the amount a senior pays above $2,830 spent out of pocket in prescription drug costs and below $4,550. The good news is that this amount is slated to shrink: with the passing of the Health Care and Education Reconciliation Act of 2010 and the Patient Protection and Affordable Care Act of 2010 - (formerly called the health reform bill) there will be a:
- 50 percent reduction in size of the Part D donut hole by 2011
- 50 percent discount on certain brand name drugs purchased inside the coverage gap
- full elimination of the coverage gap entirely by 2020.
When Will the Health Care Bill Go Into Effect? Timeline for Changes Relating to the Medicare Part D Doughnut Hole
The health care reform bill will cut the doughnut hole in half for seniors by 2011.
In 2010, people who fall into the coverage gap will receive a $250 rebate.
By 2020, the coverage gap will be eliminated.
Medication Coverage in the Doughnut Hole
Note that there are no standalone prescription drug plans that will offer full coverage in the donut hole in 2010. However, there may be some coverage during the coverage gap. Generic drugs may be covered, though those prescription drug plans tend to have higher premiums.
To see whether there is any coverage, use the Prescription Drug Plan Finder. For help using this PDP finder, check out the Quick Route Through the Medicare Drug Plan Finder 2009 by the AARP.
Who Will Hit the Donut Hole in the Part D Plan?
According to the AARP, you won't hit the doughnut hole in the Medicare Part D prescription drug plan if your particular plan covers generic drugs and those are all you use, if your medication expenses for the year does not top $2,830, if you qualify for the Extra Help program - or if you have outside prescription medications coverage.
When Will You Get the Donut Hole Refund Check for $250? And How Do You Get the Rebate?
Those who reach the Part D doughnut hole in 2010 will be automatically sent the one-time rebate $250 check by Medicare. The checks will start to be mailed beginning June 10, 2010. After that, the checks will be mailed out to Medicare beneficiaries monthly as they become eligible. (Remember, this is only a one-time refund check. Each person eligible will only get one check for $250.)
As for whether you need to do anything to get the check - no, you don't. They will be sent by Medicare without your needing to apply or place a claim.
And take care! If somebody calls you about the rebate check asking for your social security number or other personal information, do not give it out. Report them to Medicare at: 1-800-MEDICARE (1-800-633-4227).
What Out-of-Pocket Expenses Count Toward the Coverage Gap?
According to Medicare.gov, people on the Part D plan have an annual limit of how much they will have to pay out of pocket. Contributing to this limit are the:
- annual deductible
- coinsurance or copayments
- money paid by the enrollee, by a friend or family member, by a charity, or by a state pharmacy assistance program for your prescription drugs during the "donut hole" coverage gap.
Not counting toward the limit are:
- the premiums paid toward the drug plan
- out of pocket costs paid for drugs not on the drug plan's formulary
- drugs bought in a foreign country
- prescription drug payments made by a group insurer (federal, employer, etc.)
Read More About the Medicare PDP Part D Donut Hole
For more historical details about the coverage gap, refer to my article covering last year's gap and written before the health reform bill passed in 2010, The Doughnut Hole in the Medicare Part D Prescription Drug Program: What You Should Know for 2009.
Fore more information about the affects of the health care bill on seniors, see America's Seniors and Health Insurance Reform.
For more information about the Health Reform Bill, visit HealthReform.gov and click on your U.S. state of residence. You'll find a list of general points about the bill as it applies to your state.