Closing the Medicare Part D Donut Hole

What is the Medicare Part D Donut Hole?

In March 2010, Congress passed The Affordable Care Act (ACA), sometimes called ObamaCare.  This comprehensive health-care plan provided many improvement to Medicare including the closing of the Medicare Part D coverage gap by the year 2020.

The Coverage Gap, often referred to as the “Donut Hole”, occurs once you and your drug plan have spent a certain amount of money for drugs.  The coverage gap causes Medicare Members to pay a higher portion of the drug costs, after their discounts.  Members stay in the Gap until they reach the other end of the gap, referred to as the Catastrophic Coverage Period.  The out-of-pocket portion the Medicare Member pays will decrease until 2020.

See below for more on how this will function and affect Medicare Part D prescription drug plans.

2017 Standard Drug Benefit

How does the discount work?

Brand-Name Drugs

  1. In 2017, a member’s cost share is 40% of the plan’s cost for the brand name drug when you are in the Coverage Gap
    • You get these savings if you buy your prescriptions at a pharmacy or order them through the mail.
  2. Although you’ll pay no more than 40% of the price for the brand-name drug in 2017, 90% of the price—what you pay plus the 50% manufacturer discount payment—will count as out-of-pocket costs which will help you get out of the coverage gap.

EXAMPLE:

Mrs. Anderson reaches the coverage gap in her Medicare drug plan. She goes to her pharmacy to fill a prescription for a covered brand-name drug. The price for the drug is $60, and there’s a $2 dispensing fee that gets added to the cost. Mrs. Anderson pays 40% of the plan’s cost for the drug and dispensing fee ($62 x .40 = $24.80).

The amount Mrs. Anderson pays ($24.80) plus the manufacturer discount payment ($30.00) count as out-of-pocket spending. So, $54.80 counts as out-of-pocket spending and helps Mrs. Anderson get out of the coverage gap. The remaining $7.20, which is 10% of the drug cost and 60% of the dispensing fee paid by the drug plan, doesn’t count toward Mrs. Anderson’s out-of-pocket spending.

Generic Drugs

  1. In 2017, a member’s cost share is 51% of the plan’s cost for the generic drug when you are in the Coverage Gap.
    • The coverage gap will decrease each year until it reaches 25% in 2020.
  2. For generic drugs, only the amount you pay will count toward getting you out of the coverage gap.

EXAMPLE

Mr. Evans reaches the coverage gap in his Medicare drug plan. He goes to his pharmacy to fill a prescription for a covered generic drug. The price for the drug is $20, and there’s a $2 dispensing fee that gets added to the cost. Mr. Evans will pay 51% of the plan’s cost for the drug and dispensing fee ($22 x .51 = $11.22). The $11.22 he pays will be counted as out-of-pocket spending to help him get out of the coverage gap.

What is the Difference between Brand Names and Generic Drugs?

What counts towards the coverage gap

Items that don’t count towards the coverage gap

  • The drug plan premium
  • Pharmacy dispensing fee
  • What you pay for drugs that aren’t covered

Should get a discount?

If you think you’ve reached the coverage gap and you don’t get a discount when you pay for your brand-name prescription, review your next “Explanation of Benefits” (EOB).  If the discount doesn’t appear on the EOB, contact your drug plan to make sure that your prescription records are correct and up-to-date. Get your plan’s contact information from a Personalized Search (under General Search), or search by plan name.  If your drug plan doesn’t agree that you’re owed a discount, you can file an appeal.

READ MORE: http://www.medicare.gov/pubs/pdf/11493.pdf

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What can I do if my Medicare Advantage plan leaves?

What do I do if my Medicare Advantage plan Terminates my Coverage?

At the beginning of each calendar year, Medicare Advantage (MA) plans can make changes to their benefits, premiums, copayments and geographic service areas. They must notify their members every fall of the changes they intend to make the following year. They can add or drop benefits, change premiums and copayments, and begin or discontinue serving a certain county or region. MA plans must get permission from the Centers for Medicare and Medicaid Services (CMS)before making any changes, and notify their members by early October of changes effective January 1 of the following year.

Sometimes at the end of the year, Medicare Advantage Plans can decide to leave the Medicare Program, pull their plans from the area and leave Medicare Eligibles in need of a new plan.  If you have gotten a letter stating your plan is leaving the Medicare Program, the letter you receive will explain your options.

Keep Reading..What can I do if my Medicare Advantage plan leaves?

How to Afford Quality Dental Care

You have a dental problem that needs attention, but you’re not sure how to pay for your trip to the dentist. Take a deep breath – it’s okay. There are several ways you can afford quality dental care without putting yourself in a financial tailspin.

This guide will help you understand the options you’ll have when budgeting for a dental procedure. We’ll cover expected costs for common procedures. We’ll look at what to do if you don’t have insurance. And we’ll go over the basics of dental financing, dental credit cards, HSAs/FSAs, dental savings plans and dental insurance.

Because every situation is different, we recommend working closely with your dentist and insurance provider (if applicable) to make a plan that fits your needs and budget. But a general understanding of what’s out there will help you ask the right questions.

Let’s get started.

Keep Reading..How to Afford Quality Dental Care

How Do You Change Medicare Advantage Plans?

How Do You Change Medicare Advantage Plans?  There is the Annual Election Period allows Medicare Member to make changes to their coverage every year.  This allows them to make the changes that fit their needs in the year to come or to improve their coverage completely.  It pays to review your coverage every year and evaluate whether it’s right for you based upon:

  • Coverage
  • Convenience
  • Cost

Keep Reading..How Do You Change Medicare Advantage Plans?