How Will Health Reform Change Medicare Part D?
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, including:
- In 2010, if you had expenses in the coverage gap, you should have received a $250 rebate from Medicare.
- Beginning in 2011, if you reach the donut hole, you will be given a 50% discount on the total cost of brand name drugs while in the gap.
- Medicare will phase in additional discounts on the cost of both brand name and generic drugs.
By 2020, these changes will effectively close the coverage gap and rather than paying 100% of the costs, your responsibility will be 25% of the costs.
Although the coverage gap will eventually be eliminated, it is important to remember that you will still be responsible for paying 25% of the costs of your prescription drugs. If you take a lot of medications or ones that are expensive, the costs could still be burdensome. It's important, therefor, that you are aware of resources that may be able to help you.
How Many People Reach the Donut Hole?
According to a 2008 report from the Kaiser Family Foundation, 3.4 million Medicare Part D plan participants reached the coverage gap in their prescription drug coverage in 2007. This gap - known as the "donut hole" - is the period during which people with a Medicare drug plan have to pay for 100% of their drug costs.
The Kaiser Foundation found that more than 25% of people who had joined a Medicare prescription drug plan who filled any prescriptions in 2007, reached the coverage gap. People with chronic conditions, such as Alzheimer's disease, diabetes and depression, had a much higher risk of reaching the coverage gap.
How Soon Did Part D Enrollees Reach the Donut Hole and How Long Did They Stay in the Gap?
About half of all people who joined a Medicare prescription drug plan who had drug costs high enough to reach the donut hole in 2007 did so by the end of August.
Most people who reached the donut hole in July or later spent the rest of the year in the coverage gap.
Did People Change Their Use of Medications When They Reached the Donut Hole?
Some people who reach the donut hole stop taking their medication. Looking at eight different types of medications prescribed for a variety of common health conditions, the Kaiser Foundation found that about 15% of people who reached the coverage gap stopped their medications.
For example, 10% of people in a Medicare drug plan who were taking oral medications for the treatment of type 2 diabetes who reached the coverage gap stopped taking their medications. For a person with diabetes, stopping medication for even a short period of time can cause serious and immediate health problems.
The complete report is available from the Kaiser Family Foundation: The Medicare Part D Coverage Gap: Costs and Consequences In 2007.
How Can I Lower My Drug Costs in the Donut Hole?
Consider switching to a less-expensive drug
One of the easiest ways to lower your prescription drug costs in the donut hole is to switch to lower cost or generic drugs, as available and appropriate. You can talk with your doctor about the medications you are currently taking to find out if there are generic or less-expensive brand-name drugs that would work just as well as the ones you're taking now.
For example, if you take Zoloft for depression, you can save more than $100 each month by switching to sertraline, the generic version of Zoloft.
Order a 3-month supply of your medication
If you have a chronic condition, such as diabetes, ask your doctor to write a prescription for a 90-day supply of your medication. Many Medicare drug plans offer a discount if you use their mail-order program. Also, your local pharmacy may give you a 90-day supply of your medications for the same price as the mail-order plan.
Explore national and community-based charities
Several national and community-based charities have programs that can help you with the cost of your medications. A good place to start is the website of Benefits Checkup, a service of the National Council on Aging. The site provides easy-to-read information about the Medicare prescription drug plan, how to find additional benefits and how to apply for extra help.
Look into pharmaceutical assistance programs
Many major drug companies offer assistance programs for people enrolled in a Medicare drug plan. You can find out whether a Patient Assistance Program is offered by the manufacturers of the drugs you take by visiting the Pharmaceutical Assistance Program page on the Medicare website.
All you need to do is find your medication in the alphabetical list. The site then provides information about available savings programs and a link to the drug company's site to obtain information on how to apply for assistance.
Consider state pharmaceutical assistance programs
More than 20 states offer help with paying drug plan premiums and other drug costs. You can find out if your state has a program by visiting the State Pharmaceutical Assistance Program page on the Medicare website.
Apply for the Extra Help program
If you have a Medicare drug plan and have limited income and resources, you may qualify for extra help paying for your prescription medications.
This extra help, available through the Social Security Administration, can save you money by paying for part of your monthly premiums, annual deductibles and prescription copayments. The Extra Help program could save you up to $3,900 per year.
Is There Anything That I Can Do to Avoid the Donut Hole?
Yes. You can avoid the donut hole if you are able to keep the cost of your drugs below $2,840 in 2011. One of the best ways to do this is to ask your doctor to switch you to generic medications, if available and appropriate.
Do Any Part D Drug Plans Pay for Drugs in the Donut hole?
Yes. In 2011, some Medicare Part D drug plans have some drug coverage in the donut hole. These plans, however, will most likely have a higher monthly premium and will only pay for certain generic medications.