By Prue Salasky, email@example.com | 757-247-4784
November 19, 2012
For one in six Americans on Medicare, mostly seniors age 65 and older, the "doughnut hole" remains an expensive gap in coverage. The addition, in 2006, of Medicare Part D to the government's health insurance program, promised prescription coverage — up to a point.
With a cut-off in benefits at around $2,800 last year, 15 percent of participants, whether through Part D or a Medicare Advantage plan with a private insurer, encountered the "doughnut hole," or coverage gap. That can leave participants on the hook for close to $4,000 in out-of-pocket payments for prescriptions until "catastrophic" coverage kicks in.
In 2010, the Affordable Care Act committed to eliminating the prescription coverage gap by 2020. The government started by issuing $250 rebate checks to individuals in the "doughnut hole," and this year expanded its support by offering manufacturer-paid discounts on select brand-name drugs and generics to help reduce the out-of-pocket spending by the chronically ill.
Not everyone has seen a difference, though. Ellen Weston, 60, has been on Medicare disability since her 20s from psoriatic rheumatoid arthritis. A Newport News resident, Weston has fallen into the "doughnut hole" every year, but has never reached the "catastrophic" coverage, instead opting not to treat her psoriasis. "It's horrible. I start the year with drugs not costing me anything. Before I know it, I'm in the doughnut hole. My diseases are mostly constant — thyroid and high cholesterol — but they have to be managed," she said.
Because of the high cost of drugs she must use, such as Celebrex, which costs $290 a month, Weston has not been helped by the ACA's interim measures to close the coverage gap. Her complex medical condition prevents her from taking advantage of cheaper alternatives.
Also, Weston cannot insure herself against the coverage gap as her relative youth prevents her from qualifying for a Medigap plan, available only to seniors age 65 and older. "You have to be virtually destitute to get help. It's just sad that people are put in this spot," she said.
Al Weiss, 86, also a Newport News resident, hit the "doughnut hole" once a few years ago when he was diagnosed with prostate cancer. "I was going along great, then suddenly something happens and you're living on a retirement income," he said. His out-of-pocket costs were around $3,500, but he was able to arrange a payment plan that gave him plenty of time to absorb the hit.
Despite its shortcomings, seniors should still get a Part D plan, according to Lisa Walker, a Medicare specialist with the Virginia Insurance Counseling and Assistance Program at Bay Aging. "If a person doesn't take any meds, it is still a good idea to get a Part D plan," she said. For 2013, the cheapest plan in Virginia is $15 a month with a $325 deductible, available through AARP; the cheapest plan with no deductible is $26.80 a month from First Health, she explained. "So, for a rather low cost you have coverage in case something does happen," she said.
If an individual doesn't sign up before the Dec. 7 deadline, then they have to wait until the next annual enrollment period to sign up for a drug plan, and they will incur a lifelong penalty.
According to the Medicare Guide to Drug Coverage, the late enrollment penalty is calculated by multiplying the 1 percent penalty rate by the "national base beneficiary premium" — $31.08 in 2012 — times the number of full, uncovered months the senior was eligible to join a Medicare drug plan but didn't and went without other creditable prescription drug coverage. (Those in group policies through retirement plans typically have "other creditable prescription drug coverage," but not all do, so it's politic to check.)
"You have to know the questions to ask. Everyone's different, every group is different, and whatever plan you select is different," said Hampton resident Barbara Weiss, 71, a retired Blue Cross/Blue Shield employee who receives group benefits through her retirement plan.
Prescriptions are covered either through a Part D plan, or a Medicare Advantage plan with a private insurer. For seniors signing up for prescription coverage, Medicare has an 84-page booklet describing their options.
"I have a little more knowledge than most, but it's still Greek to me. It's not easy for the average person," said Weiss, who takes medication for Parkinson's disease.
According to the Department of Health and Human Services. access to discounted drugs for those in the "doughnut hole" has reduced seniors' out-of-pocket spending on prescriptions nationally by an average of $657, a number mirrored in Virginia, where more than 52,000 beneficiaries shared in $108 million in savings.
For 2013, people with Medicare in the doughnut hole will receive deeper drug discounts, about 53 percent on the cost of brand name drugs and a 21 percent savings for the cost of generic drugs. These percentages will gradually increase until 2020, when the doughnut hole will be closed.
Need help with Medicare?
Open enrollment period for Medicare started Oct. 15 and runs through Dec. 7 for plans starting Jan. 1, 2013. For information, go to http://www.medicare.gov or call 1-800-633-4227.
Also, free counseling is available from the Virginia Insurance Counseling and Assistance Program, 1-800-552-3402, or from Lisa Walker, Medicare counselor for VICAP, 866-758-2386.
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