The Medicare Gap or Donut Hole
First Time Visitor? Welcome
FinancialLearn.com is dedicated to finding great deals, free stuff, and promote frugal living. We are delighted to have you here.
Sound Fun? Have our articles delivered to you via RSS Feed or E-mail to be reminded of new and upcoming contests and articles.
The Medicare gap or “donut hole” can be very confusing. If this part of the Medicare drug coverage is not understood in regards to each persons own prescription medication cost it can cause extreme financial hardship. Most Medicare part D plans have an area when there is no coverage for drugs. This coverage is when a person’s drug expenses ore over the standard level of coverage and before the catastrophic coverage begins. A lot of Medicare recipients never go over the standard level of coverage but many do. After a person has reached the standard level of coverage they are responsible for 100% of their medication costs. For the ones that do, not having supplemental gap coverage may mean choosing between food and their heart medication.
Standard level of coverage
A standard level of coverage must be met by all private drug plans. The minimum level of coverage 2008 is $2,510. The standard coverage amounts may be higher with different plans. The standard level of coverage amount is the total amount paid for drugs (not including premiums). Some people’s expenses never go over the standard level of coverage while other get over it very soon. The difference between the plans standard of care and catastrophic care is the coverage gap.
Coverage gap
The Medicare gap starts after the minimum standard coverage amount is reached and is in effect until your personal out of pocket expenses for covered drugs reaches 4,050. All plans are required to start catastrophic coverage once the $4,050 has been met. If you are in a private drug plan without gap coverage than you will be paying the full cost of all drugs between the standard care limit (usually 2,510) and 4,050 when catastrophic coverage begins. This gap and how your personal medications cost are incurred will be a major deciding factor in your choice of plans.
Costs that count toward Medicare gap
Not all prescription costs count toward the gap. Here is a list of some that do count toward the gap
• Costs that are paid by family members
• Costs paid by some charities that are not affiliated with employers or unions
• Some costs that are paid by state pharmacy assistance programs
As much as it is important to know what costs do count it is equally important to know what does not. Expenses that other insurance such as employers, government programs, unions, and workers’ compensation do not count.
Tracking Medicare gap expenses
The prescription drug plan is responsible for tracking a person’s drug expenses. This continues during the gap. You will want to continue to use your drug plans prescription card during the gap. Your individual drug costs during the gap are determined by your plans pharmacy discount and your plans formulary and where each drug is in their tier system. If you are able to use a pharmacy card that makes the drugs cost less than your plans card you may use it. You will have to mail in the receipt to your plan so that they can add those costs to your out of pocket expense.
Effect of Medicare Coverage gap
The coverage gap’s effect is different for everyone because of how the different plans are structured. Understanding your co-payment, deductible, plans formulary and tiers is vital since these will affect when the gap starts and how long of a time period you will be in the gap. Every state offers at least one plan that provides gap coverage. From November 15-December 31 of each year Medicare has open enrollment for drug plans. If your plans gap has had a detrimental effect than you will want to research the available pans and consider changing plans. There are supplemental gap plans that also may be beneficial depending on your needs.
Related Posts
- Medicare Catastrophic Drug Coverage
- Medicare Drug Plans
- Medicare Drug Plan Formulary
- Social Security Medicare
- Social Security 101
- Social Security Administration
- Benefits of Annuities for Retirement
