About now, many who chose a Medicare Part D plan earlier in the year are hitting the dreaded doughnut hole in coverage—the point where they must begin paying the total cost for their prescriptions. This occurs when a recipient’s drug costs have reached the limit the plan he or she chose will cover for the year. Below, Jacob Burkett, a lawyer who works as a benefits specialist at the Mental Health Association of Southeastern Pennsylvania, the Clearinghouse’s mother organization, describes in further detail what the doughnut hole is about, why many recipients didn’t see it coming, and what they can do now to mitigate the crisis.
Jake’s Take:
Generally, doughnuts and doughnut holes are not viewed as the wisest approach to your health. Nonetheless, many Medicare Part D plans include them. That’s right; these plans can have huge gaps in coverage, which are referred to as “doughnut holes.” During these gaps in coverage, the consumer is responsible for paying for the entire drug cost in addition to the monthly premiums.
Essentially, it works like this:
- a consumer is enticed to enroll in a plan because it has reasonable co-pays and premiums
- The consumer pays the deductible and begins using the plan to obtain his or her prescription drugs, paying a co-pay each time.
- When the total amount of drug costs reaches around $2,251, the consumer is held responsible for the entire cost of each drug—a 100% co-pay (the “doughnut hole”).
- The consumer is then expected to continue paying 100% out of pocket until total drug spending reaches around $5,100, at which point Medicare will step in and pay 95% of the costs.
Why would consumers knowingly choose a plan that would leave them paying 100% for their scripts? In many instances, Medicare recipients were simply confused. In selecting a plan, they had to choose from dozens. Each plan offered different co-pays, premiums, deductibles, doughnut hole coverage, drug formularies, and network providers. Anyone would find it difficult to consider all six of these factors when selecting a plan and could easily overlook one of them. Many consumers didn’t realize they would reach the coverage gap so quickly, either because they did not know the total costs of their medications or did not realize the amount included funds paid by the plan. And more and more consumers are now becoming aware of their oversight when they are told by their pharmacist they have zero coverage from their plan.
Here is a typical example of the doughnut hole in action: A consumer pays a $25 co-pay for a monthly medication that is $625. The total amount of the drug would be $625 and the coverage gap would be reached after just 4 months. The consumer then must pay for another 4 months at the full price of $625 until the government steps in with catastrophic coverage after costs exceed $5,100. In all, the consumer would end up paying $100 in co-pays under the plan, $2,500 in the doughnut hole, and then $125 after the $5,100 threshold is reached. And, on top of these costs, consumers are expected to continue paying their monthly premium- even when the plan is not paying anything for their medications.
Of course, not all plans are bad. Many plans have provided consumers with significant savings, and some plans do not have any coverage gaps. The problem some consumers have is not knowing what plan best suits their needs. Medicare recipients, or their caregivers, can call Medicare at 1-800-MEDICARE for assistance in selecting a plan. Internet savvy recipients can use the very helpful “Plan Finder” at
www.medicare.gov. By investigating all the options, recipients should be able to find a plan that meets their individual needs.
There is still hope for those currently stuck in the doughnut hole. Though they can generally only change plans beginning November 15th, there are places they can turn for help until that point. Consumers can apply for help from drug manufacturer programs that assist those who cannot afford medications. Each plan is different and frequently will only cover specific medications, but it is nonetheless worth a try. To find all these plans, visit:
www.pparx.orgAffected consumers also need to consult their healthcare providers. Many medications should not be abruptly discontinued, so consumers need to inform their providers of any changes. Moreover, their physicians may discuss medication alternatives or even provide samples to get consumers through.
Consumers should also contact their legislative representatives about their predicament. Some states have programs that may cover drug costs in the doughnut hole, like the PACE Program in Pennsylvania. Additionally, calling senators and representatives will let them know that they need to fix Medicare Part D. The links below will provide you with the contact information for your legislators.
http://
www.senate.gov/http://
www.house.gov/