Getting through the doughnut hole

It is approximately this time each year when thousands of individuals on Medicare begin to enter the gap in coverage or “doughnut hole” for their prescription drug plan.

Each January, Medicare beneficiaries who elect to enroll in a prescription drug plan select a plan that best fits their needs. The plans, with regulation from the federal government, cover clients in three phases: initial, the gap and catastrophic.

Individuals who require very little medication generally stay in the initial phase of coverage throughout the entire year, but those who take several medications can breeze through the initial phase and enter the gap phase by April or May. Depending upon the type of policy an individual selects and cost of the policy, coverage in the gap can range from no coverage at all to generic coverage only.

Those individuals with no coverage are required to pay out of pocket — up to $2,500 — before entering the catastrophic coverage phase, which pays the cost of nearly all medications. This out of pocket expense is more than most Medicare beneficiaries and can afford and many must choose between purchasing medications, paying bills or buying groceries.

This year, unlike years past, those who enter the prescription drug doughnut hole will be eligible to receive a one-time rebate of $250 from Medicare. As required by the new law, the U.S. Department of Health and Human Services plans to issue $250 rebate checks to Medicare beneficiaries who have reached the “doughnut hole” in prescription drug coverage.

The check will be sent directly by Medicare and there is no application process. Medicare beneficiaries who are now in the doughnut hole should expect the first checks to be mailed on June 15, 2010.

The Centers for Medicare & Medicaid Services projects four million beneficiaries will receive a check in 2010. About 80,000 checks will be mailed June 15. The remainder will be mailed as Medicare beneficiaries hit the gap.

For more information on such programs, visit M4a-alabama.org.