Health Insurance Articles

Three Ways For Seniors To Navigate The Donut Hole

2010-08-19

For adults 65 years of age or older who are covered by the Medicare Part D plan, the donut hole is a feature of your insurance coverage that you should be aware of, if you are not already. As part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, the donut hole, or gap coverage as it is commonly referred to, was the most divisive portion.

The donut hole went into effect on January 1, 2010, and today, it still has seniors and senior advocates up in arms. So what is the donut hole? Once seniors have spent $2,830 on the overall cost of prescription drugs, they fall into the donut hole. That includes your co-pay plus the costs paid under your insurance coverage. You emerge from the donut hole after spending a total of $4,550. However, you are responsible for covering 100 percent of your medication costs while in the hole. For many seniors, this means going from an affordable co-pay to receiving bills for thousands of dollars.

Here are three ways seniors can both prepare for and manage the donut hole.

First, act preemptively, and schedule an appointment with your doctor. Often, physicians can help you decide what medicines are 100 percent mandatory and find generic versions of the brand names you are taking that cost less. Some doctors can help you make lifestyle changes that support a temporary reduction in medications. However, it is possible your doctor will suggest closing the hole yourself-receiving enough medication to reach the $4,550 threshold quickly. Then, smaller monthly payments can be made.

Second, do research on companies that offer prescription cost relief. In 2010, having heard the cries and complaints of seniors, Medicare is distributing $250 to each citizen who falls into the donut hole during the year. That brings minimal relief, but there are other organizations that might be able to help cover some costs during the donut hole period.

For many seniors, avoiding the donut hole is impossible. The best way to navigate through the donut hole is to save. It is not uncommon for retirees, veterans and seniors on Social Security to be strapped for money. Still, having a cushion of cash can provide you with the peace of mind and financial stability to get through more smoothly.

The donut hole is closing, but only slowly. In 2011, seniors under the Medicare Part D insurance coverage will receive a 50 percent discount on brand name drugs and seven percent on generics. The plan is projected to cost taxpayers and the U.S. government billions, but at the same time, it will provide much needed relief for American seniors.