Question:
I enrolled in a 2007 Medicare Part D plan with NO Doughnut Hole. My Part D plan pays for both my generic and brand name medications through the entire year! This plan will save me so much money! Last year my drug expenses were sky-high with another company. The monthly premium is much higher in my 2007 plan, but it still saves tons of money.
Online Editorial Team Answer:
Very few Medicare Part D plans offered complete Doughnut Hole coverage in 2007 and, according to our information, no Medicare Part D plan with complete coverage was offered on a national basis. For instance, the Sierra RX Plus plan offered complete Doughnut Hole coverage in 2007. Unfortunately, Sierra RX plans are not offered in all states (or Part D regions), so enrollees in many states did not have the option to join a Sierra plan.
Here is a link to the information we have, for example, in
Alabama:
https://q1medicare.com/PartD-Medicare-PartD-PDP-for-Alabama-A.php?st=AL&prodid=240#SierraRx
Also, all sales of the Sierra Prescription Drug Plans were to be suspended as of February 2007. So anyone in 2007 who was new to Part D (turning 65 or new to Medicare) was not able to join a Sierra Part D plan after February.
However, back during the enrollment period of November - December 2006, the Sierra RX plans were no secret and were well publicized. In fact, many people took advantage of this Part D plan's full Doughnut Hole coverage and are probably saving a great deal of money.
A similar situation occurred in 2006 with the Humana Complete prescription plans which, at that time, offered the only very comprehensive Doughnut Hole coverage - nationally. In 2007, Humana Complete plans changed to offer more limited generic medication coverage in the Doughnut Hole or coverage gap.
What are the chances that a 2008 Medicare Part D plan will offer complete Doughnut Hole coverage? We would suspect that very few Medicare Part D plan will offer comprehensive Doughnut Hole coverage in 2008. We certainly do not know for sure, but such complete prescription coverage is relatively expensive and risky for many of the insurance carriers. We will all know for sure when CMS releases the new Part D plan designs In September, 2007.
Here is also a bit of interesting information published earlier this year by
The Hill:
"In 30 states and the District of Columbia, Sierra sells three drug plans, including SierraRx Plus, which provides full coverage of brand-name and generic medicines during the Part D coverage gap known as the “doughnut hole.” The plan carries a hefty monthly premium of about $85."
...
"During [a conference call with investment analyst], Sierra President and Chief Executive Anthony Marlon delivered the bad news: 'As we looked at the first month’s results, it became apparent that the pharmacy costs on this product were much higher than we and our independent actuaries had projected.'
Sierra will discontinue the money-losing plan next year [emphasis added], Marlon assured the analysts. In the meantime, the company is on the hook for the drug claims of its 42,000 SierraRx Plus customers for the remainder of the year, he added. The number of enrollees and the amount and cost of their drugs are wildly different than anything Sierra has experienced in the past, Marlon said.
'I just know that [the beneficiaries] use an extraordinary amount of drugs and, when I look at the list of drugs, it is unfamiliar to me. It is nothing like I have ever seen before on any population,' Marlon, who is a medical doctor, said.
SierraRx Plus suffers from an extraordinary level of 'adverse selection,' Marlon said, meaning the plan attracted too many high-cost beneficiaries and too few low-cost ones."
(The Hill, Jeffrey Young, March 07, 2007)
(http://thehill.com/ leading-the-news/ feds-probe-humana -over-rx-drug-patients -2007-03-07.html)
Bottom Line: If you are enjoying a 2007 Medicare Part D plan with COMPLETE Doughnut Hole coverage, you may wish to bank away some of your current prescription savings just in case the prescription drug plans change in 2008 and you are not able to find a 2008 Part D plan with complete Doughnut Hole Coverage.