A Medicare Gap: The 'Doughnut Hole'

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The ‘doughnut hole’ is a gap, a gap that many senior citizens have fallen into when their medications and prescriptions become too expensive. This Medicare coverage shortcoming has united seniors around the country facing the same out of pocket expenses they no longer feel comfortable paying.

The ‘doughnut hole’ as it has been nicknamed, is associated with thousands of Americans who have reached their initial coverage limit in their individual Medicare plans. This can range anywhere from $750-$3500 depending on the beneficiary. Although, with a co-pay, the drug cost may be lower to the individual the entire cost of the drug is deducted from their limit. Once the limit is exceeded many fall into the ‘doughnut hole’ and are only able to receive assistance again when their out of pocket expenses reach a ‘catastrophic coverage’ level. This number is determined by the total amount of out of pocket costs an individual faces each year. Where the initial coverage limit uses the full cost of a drug in its calculations the ‘catastrophic coverage’ does not. This limit is only what the beneficiary pays for deductibles, co-payments, and insurance and in 2007 was approximately $3,850.

If the ‘doughnut hole’ drug plan hasn’t confused its victims enough, more regulations exist. There are some drugs that cannot be counted toward either of the limitations including prescriptions bought in foreign countries and from non-network pharmacies.

The Associated Press wrote earlier today:

“The doughnut hole was designed to reduce the overall cost of the [Medicare] program. An estimated 3.4 million seniors fall into it each year.

Most people never see the other side of the doughnut hole. They simply wait for New Year's Day. The House health care bill would close the gap gradually until it's eliminated in 2022.

There are about 39 million people aged 65 and older in the U.S. and they voted at a higher rate than any other age group in the 2008 election, according to the Census Bureau. The 40-million-member AARP has endorsed the House's version of the bill, but voters aren't yet sold on the plan.”

Still, many Americans struggle to keep track of these expenses and have dipped into savings to continue on their required medications. Lawmakers in Washington have tried to appease them by claiming steps are being taken to close this gap and provide more complete coverage for seniors. Their claims face skepticism and disdain but others are happy for any sort of assistance that will alleviate their financial woes.

To understand what benefits you or your relatives have is a direct correlation of how much your plan costs. Know and understand the limitations in the plan and anticipate when and how out of pocket costs begin. Sometimes the ‘doughnut hole’ is an unavoidable pitfall, as drug costs are high and doctors have deemed prescriptions necessary for the well being of many seniors today.

Sources:
http://www.medicareadvocacy.org/PartD_CalculatingCostsThroughDonutHole.htm

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