February 2, 2006
Q: I've heard a lot about the "doughnut hole" in the new Medicare drug benefit. Can you help me understand what it is and how it affects me? -- Marjorie
Dear Marjorie:
The “doughnut hole” describes the coverage gap in the standard drug benefit offered by many Medicare prescription drug plans. Typically, enrollees share costs with the plan until their total drug costs reach $2,250 (or about $750 out of pocket). After that point, enrollees pay all of their drug costs until they have spent $3,600 out of pocket in 2006 (the “doughnut hole”). If they have expenses above that level, their Medicare drug plan will pay 95% of the cost for covered drugs for the remainder of the year.
If you think you might end up with expenses high enough to reach the doughnut hole, here are some tips to consider. First, while the majority of Medicare drug plans have a gap in coverage, you may be able to find a plan with some coverage in the doughnut hole. Typically, these plans have higher monthly premiums and may only cover generics in the gap.
Second, if you are enrolled in a Medicare drug plan that has a doughnut hole, try to find out how much you will pay for each of your prescriptions when you reach the benefit gap. This information varies from plan to plan, but it is available on Medicare.gov and should be available by calling your Medicare drug plan.
Third, if you are enrolled in a Medicare drug plan with a doughnut hole, plan ahead so you can anticipate and prepare to pay for your prescriptions later in the year, when you will be charged for the entire cost of your drugs. You should receive monthly statements from your Medicare prescription drug plan with information about your drug expenses. If you do not receive these statements, contact your plan so you are not caught off-guard at the pharmacy counter.
This column was prepared by the Kaiser Family Foundation, an independent, non-profit private foundation based in Menlo Park, Calif., that is not affiliated with the Kaiser Permanente health plan. Do you have questions about the new Medicare drug benefit? Send your questions to Medicare Q and A. The Kaiser Family Foundation. 1330 G St., NW. Washington, DC 20005 or MedicareQ@kff.org.
(c) 2006, Knight Ridder/Tribune News Service.
Distributed by Knight Ridder/Tribune Information Services.
