What is the Medicare Doughnut Hole?

If you have been enrolled in the Medicare Prescription Drug Plan (Medicare Part D), then you should know what the term "doughnut hole" refers to. If you aren't quite sure, we explain it to you so that you are fully aware of what it means and how it can affect you.

The Medicare doughnut hole is an informal term used to describe the Medicare "coverage gap". The coverage gap is when you are responsible for the full cost of your prescription drugs under the Medicare Prescription Drug Plan (Medicare Part D).

The Medicare coverage gap occurs when the total cost of your prescription drugs reach a set amount. The total amount is what both you and your Medicare plan have paid for your covered drugs.

During 2010, the coverage gap will begin when your total amount has reached $2,830.00. That means that after your total reaches that amount, you willl have to pay for the full cost of your drugs until the total reaches $4,550.00.

Once you reach the $4550.00 amount, the coverage gap ends and you will then have catastrophic coverage for the rest of the calendar year. Depending on your Medicare Part D Plan, after this amount, you will probably pay 5% of the cost of each drug, or $2.50 for generic drugs and $6.30 for brand name drugs, whichever is the larger amount.

The new Obama Health Care Reform Law will close the "doughnut hole" coverage gap by 2020. The new health care law also requires the Department of Health and Human Services (HHS), issue a rebate check in the amount of $250.00 if you have entered the coverage gap. This is a one time rebate that you will get automatically if you are eligible.

The first set of check were mailed out in mid-June to Medicare benficiaries that already entered the coverage gap. Rebate checks will be mailed monthly to everyone that enters the coverage gap during 2010. If you are getting financial assistance to help pay for your Medicare drug costs, you will not be eligible for the rebate check.

In 2011, the new health care reform law will give discounts for both generic and brand name drugs if you are in the coverage gap. During 2011, you will be responsible for 93 percent of the cost of generic drugs and 50 percent of the cost for brand name drugs while you are in the doughnut hole.

The amount you are responsible for will continue to decrease until 2020, at which time you will be responsible for 25 percent of both the brand name and generic drugs. This will completely close the coverage gap.

To make it easier for you, these discounts will be applied when you are in the coverage gap and you fill your prescription. You will need to be aware of any changes that Congress may make to this law prior to 2020.

MedicarePrograms.net is an information website owned by What Is It LLC.

Learn more about What Is It at MyWhatIsIt.com... "We Simplify The Complex".

The official U.S. Government Medicare Web site is Medicare.gov.