“My prescription costs just increased, what happened to my Medical Part D coverage?”
Are you prepared for the Medicare Part D Doughnut Hole or Coverage Gap? According to a sample of 2006 Medicare Part D beneficiary data, we expect that at least half of the Part D beneficiaries who enter the Doughnut Hole will do so in late July or early August 2007 - the Doughnut Hole is where most Part D beneficiaries will pay 100% of their prescription medication costs. As reported last month, 2007 Part D beneficiaries will enter the Doughnut Hole when the retail costs of their prescription medications reach $2,400. (Last year, the Doughnut Hole or Coverage Gap began when retail prescription costs reached $2,250.)
For those Medicare beneficiaries already in the middle of their second Medicare Part D plan year, you may recall that in 2006 the Coverage Gap or Doughnut Hole caught many Medicare Part D beneficiaries completely by surprise. Based on the questions we are already receiving this year, we see that such confusion over the Doughnut Hole will certainly be repeated in 2007.
In an analysis by the Actuarial Research Corporation for the Kaiser Family Foundation, it is estimated that over 3 Million people will enter the Doughnut Hole in 2007. In addition, even if you had Part D Doughnut Hole coverage in 2006, you may not have the same coverage this year. There are more Part D plans in 2007 than in 2006, but fewer of the 2007 Part D plans offer complete Doughnut Hole coverage. According to the Kaiser Family Foundation, the number of Medicare Part D plans in 2006 was 1,429 and in 2007 the number of Part D plans increased to 1,875. However, in 11 States there are actually no 2007 Part D plans covering both brand name and generic prescriptions in the Coverage Gap.
How can you prepare for the 2007 Doughnut Hole?
We suggest that you first determine when (and if) you will enter the Doughnut Hole. Here are a few guidelines
- First, not every Medicare Part D beneficiary will fall into the Doughnut Hole. If you have prescription costs under $200 per month, you will never reach the Coverage Gap.
- Medicaid/Medicare or “Dual-Eligible” beneficiaries will also never fall into the Doughnut Hole.
- Part D beneficiaries who have higher prescription costs (over $200 per month) will enter the Coverage Gap or Doughnut Hole at different times based on each individual person’s total retail prescription costs.
- If you have monthly retail prescription costs of over $454, you will go through the Doughnut Hole and enter into the Catastrophic Coverage portion of your Part D plan.
What will you pay in the Doughnut Hole?
When your total retail costs for prescription medications reach $2,400 - you enter the Doughnut Hole. If your Part D Plan...
- covers both brand name and generic medications in the Doughnut Hole, your Part D plan will continue as usual and you will not notice any changes in prescription costs;
- provides generic drug coverage in the Doughnut Hole, you will still receive your Part D benefit for your generics and pay full price (100%) for any of your brand name medications;
- does not provide any Doughnut Hole coverage, you will pay full price (100%) for both your brand name and generic medications while in the Coverage Gap.