After tomorrow, seniors who are heavily burdened with high cost prescriptions can begin looking in their mail boxes for a bit of relief as a result of our recent health care reform legislation. Seniors stuck in the Medicare Part D (Drug Plan) "doughnut hole" will begin receiving a one-time automatic payment from the federal government with the first checks going into the mail Thursday, June 17.
Tragically there are some people, even though the year is barely half finished, who have already "maxed out" on their coverage and can look to their mailboxes by Friday or Saturday. The "doughnut hole" is the coverage gap facing seniors, who are Medicare prescription subscribers, when they reach a point at which they must pay 100% of drug costs out of pocket (and continue paying premiums to the insurance company) until they qualify for catastrophic coverage.
This year, seniors on the plan will shell out the full price of their medications once they have spent $940 out-of-pocket (front-end co-payments) and will not get additional coverage until they have ponied up another $3,610. Once they reach this "catastrophic" level, seniors (continuing to pay their full premiums) will pay 5% of drug costs. The plan is run by private insurance companies with multiple variations, different drug coverages, and other variables which vary from company to company and from state to state--there is no single unified plan. Each year, the insurance companies raise their premiums, reduce or completely eliminate drugs in their coverage. Compounding this dismal situation for seniors is the often heard story of physicians insisting their patients take a name-brand (high cost) drug rather than its lower cost generic.
As the year progresses, seniors who hit the "doughnut hole" can expect their check within 45-days of getting there. While the $250 is welcome, it hardly makes a real dent in the burdensome drug costs faced by millions of seniors already seeing their home equity and 401K plan values decline and daily increasing energy and food cost increases.