The Medicare "Donut Hole"
The Coverage Gap
The way Medicare Part D was designed there was a planned coverage gap, which has become known as "the donut hole". This gap has caused a great deal of confusion and higher than expected out of pocket costs for medications.
When do you reach the gap?
The gap begins when a person reaches a predetermined amount during the year based on average retail cost of drugs. In 2011, that amount is set at $2840. Since Medicare drug plans negotiate for a lower price the average retail cost is not what you actually paid out of pocket. Every drug plan can have a different negotiated amount so the same drug may cost different amounts from one plan to the next. This means that two different people with two different plans will reach the gap at different times.
A person reaches the other side of the gap when their out of pocket costs reach $4550 in a year. This excludes any amounts paid by you for premiums or any amounts paid by your insurance. This means that only actual costs out of a person's pocket will count.
Catastrophic Coverage
Once a person reaches the other side of the gap they are into what is called catastrophic coverage for the rest of that year. With this catastrophic coverage a person will pay up to 5% of the drug cost and the remainder will be covered by the drug plan.
Closing the Gap
A great deal of effort is being made to close this gap and in 2011 a special program was put in place that helps cover medication costs once the gap is entered. Once a person reaches the gap they received discounts to help cover costs. For covered brand name drugs a 50% discount is offered and a 7% discount for covered generic drugs. It is expected that the gap will be closed by 2020.
Programs to help ease the burden caused by the gap include a one-time $250 rebate check mailed to eligible beneficiaries beginning in June 2011. Those in the donut hole will also be eligible to receive a 50% discount on all brand name drugs and a 7% discount on generics.
By 2013 people in the gap will begin to pay less and less for brand name drugs and by 2020 their hole will be closed completely. Beneficiaries will only pay 25% of drug costs until they reach the annual spending limit.
Click here [1] for a gap calculator
The Affordable Care Act
In March of 2010 the Affordability Care Act was signed into law. It contains a number of provisions that create changes in American healthcare over the next 5 years. Provisions include:
New consumer protections
Better quality and lower costs
Increased access to affordable care
Extra Help for Low Income
People who meet certain low-income criteria may be eligible to receive additional financial assistance with premium and drug costs. The Extra Help Program is only available to those who are enrolled in a Part D plan. To get help enrolling or for additional financial help call 1-800-MEDICARE (TTY 1-877-486-2048) or go to the Medicare website www.medicare.gov. [2]
Medicare Savings Programs
Medicare Savings Programs (MSPs) are state programs for people with limited resources or low income to help to cover Medicare costs. This application can be done at the same time as the Extra Help application. The programs vary from state to state and can help cover premium costs and in some states may help with deductibles and co-insurance costs. This link can take you to the Medicare website and information for each state: http://www.medicare.gov/contacts/staticpages/msps.aspx [3]
References
Q1 Medicare.com: http://www.q1medicare.com/PartD-MoreOnTheDonutHolesOrCoverageGap.php [4]
Medicare website: https://secure.ssa.gov/apps6z/i1020/main.html [5]
Medicare Savings Programs: http://www.medicare.gov/contacts/staticpages/msps.aspx [3]
Can the Medicare "Donut Hole" Affect Kidney Patients?
The short answer to this question is "maybe". The longer answer reveals that the gap affects some Medicare recipients more than others. A closer look will help to explain the reason why these two answers are different and how your patient may be affected.
What is it?
The "donut hole" is a gap in prescription drug coverage under Medicare. This gap begins when a person reaches a predetermined amount during the year based on average retail cost of drugs. In 2011 the gap begins when a person spends $2840 in actual out of pocket drug costs in a year. They reach the other side when their costs hit $4550 in that same year. Steps are being taken to minimize the impact on seniors and the gap will be completely eliminated by 2020 through rebates and discounts for those who fall into this gap.
What does this mean for providers?
Many patients, especially those on fixed incomes, may have difficulty paying for their medications when their Medicare drug coverage stops. This can mean that patients take less of their drug to make it last longer or skip doses. Some stop taking their medication altogether. Obviously all of these can impact the health of the patient. The good news is that there are programs available to help bridge this gap for Medicare recipients.
What kind of help?
Those affected by the donut hole will receive a $250 rebate check. They will also receive a 50% discount off the price of brand name drugs and 7% off of generic drugs. This discount is being paid for by pharmaceutical companies. Patients will pay less over the next few years until they only pay for 25% of the cost until they reach an annual limit.
Independent co-pay foundations can cover out of pocket costs for drugs for Medicare recipients with standard part D coverage. Those with commercial or private health insurance may be eligible for discount programs through specific pharmaceutical companies.
Patients who are eligible for both Medicare and Medicaid, known as dual eligible, are usually not affected by this donut hole.
What can providers do?
Talk to patients about their prescriptions. Be alert to signs that they may not be taking them as ordered and be sensitive that cost may be a factor. Understanding the donut hole will help you to identify those patients who may be at risk due to the donut hole. Taking the time to talk to patients about these risks can help determine what kind of assistance they may need. Being familiar with available resources will help successfully connect your patients to the right programs.
It is critical to be an active and engaged participant in your own care. Reading this article will help you make sure you are getting the care you need. Any time new medicines or tests are ordered for you, it is important to ask questions. It can be intimidating to ask doctors or nurses these questions, but you are not able to make informed decisions without all of the facts. The Agency for Healthcare Research and Quality's (AHRQ), part of the part of the Department of Health and Human Services, was created to help with this process. The AHRQ has developed a patient guide of questions to help start the conversation with all of your health care providers.
When your doctor orders a new medicine
When your doctor orders medical tests
When your doctor suggests a treatment for an illness or condition
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When you order a new medicine
When your order medical tests
When you suggest a treatment for an illness or condition
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Links
[1] http://www.q1medicare.com/PartD-PartDCoverageGapCalculator07Xphp.php
[2] http://www.medicare.gov/
[3] http://www.medicare.gov/contacts/staticpages/msps.aspx
[4] http://www.q1medicare.com/PartD-MoreOnTheDonutHolesOrCoverageGap.php
[5] https://secure.ssa.gov/apps6z/i1020/main.html