Medicare Part-D Doughnut Hole for 2012

March 26, 2012 Senior Medicare Issues

The Medicare doughnut-hole can be a source of anxiety and stress for cash-strapped seniors with extensive medicine bills. As part of the 2006 Medicare Part D Prescription Drug Plan, the donut-hole keeps the Medicare payments for prescription drugs in check by pushing-off some of the excess drug costs to seniors.  In 2012 the donut-hole potentially forces seniors to pay up to $4,700 dollars total out-of-pock expenses a year from their own wallet when their medication needs exceeds $2,930 for their covered drugs before the catastrophic care kicks in.

Many seniors, in response to the added donut-hole expense, simply switch to the generic form of their medicine during the doughnut-hole gap in order to be able to continue taking their medication—that is if their medicine is available in a generic form.   Unfortunately, there are those who stop taking their medications altogether. According to private studies, approximately 4.2 million individuals had medicine expenses that brought them to the donut-hole gap experience last year.  A recent AARP survey found that Medicare beneficiaries reaching the doughnut hole, 15 percent decided simply not to fill their prescription, putting them at risk of serious side-effects or even worse.  As you can imagine, this can be a life-threatening issue if patients discontinue their normal course of medication.

In the Medicare program, there are federal assistance programs available to assist the poorest patients with their deductibles, premiums or co-pays, unfortunately individuals just barely above the poverty level cannot get extra help.  These are the ones that are most likely to discontinue taking their medications once they reach the doughnut hole.

Additionally, the fact that most patients are embarrassed to discuss with their physician their financial struggles, further restricts their potential options.  Medical professionals may be able to assist with directing the patient to special drug company assistance programs or issue free samples of their needed medications during gap periods simply to ensure their patients continue their medication regimen.

For individuals who are members of a Medicare Part D drug plan, and thanks to the Patient Protection and Affordable Care Act, stating in 2011 and carried through 2012, individuals will no longer need to pay the full cost of their prescription drugs when they find themselves in the dreaded donut hole period. They will now receive a 50 percent discount on “covered” brand-name (non generic) prescription drugs.

Under the new law, while a patient is in the donut hole, the individual will now pay 50 percent of the prescription while the drug manufacturer must kick-in his contribution, paying 50 percent of the “covered” drug costs. There is an added bonus factor here in that the full retail cost of the prescription drugs will still apply to the yearly getting out of the donut hole even though only fifty percent is paid for by the pharmaceutical manufacturers.  These new rules will make it easier for seniors to afford, and continue taking their prescription drugs while inside the donut hole.  If the covered Part D recipient would rather purchase a generic form of medication, they will receive a discount of 14 percent for the “covered” generic form of the drugs they need. Unfortunately, if a prescription is not covered on the individual’s Part D plan, they will pay 100 percent for that prescription and not enjoy the 50 percent discount.

There are some Medicare Part-D plans that offer donut hole gap protection.  While these generally have higher premiums, if a senior maintains a large prescription load of expensive and non-generic drugs, these can save then substantial out of pocket expenses overall.

The best news of all is that by the year 2020, the donut-hole gap will gradually be reduced to the point where it is eliminated entirely. But until then, the gap will be less and less of a problem but still an issue for seniors who have heavy medicine regimens.

The Medicare Website can offer tremendous assistance in order to better understand prices of pharmaceuticals dispensed at each drugstore participating in a particular Medicare plan. The site will also assist in understanding the total prescription drug costs, the breakout of medicine payments throughout the year and when the donut hole will kicks-in for a particular situation.

It is best for seniors on Medicare to keep their eyes on developing news stories.  They should remain informed and prepared for changes in Medicare laws and their prescription drug costs.  As the legislators, the White House, the Supreme Court and the drug companies continue to make changes and chisel-out ever-changing deals, senior’s pocketbooks are directly affected.