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Understanding the Medicare Part D Prescription Drug Plan Donut Hole

Written by Evens Stevenson

There are several significant expenses that Medicare doesn’t pay for, one of the biggest costs is prescription drug costs. Because some enrollees are taking several different prescription medications, pharmaceutical costs can quickly because one of the biggest parts of a senior’s budget. Drug costs are on the rise, and though Medicare does offer some coverage, to avoid paying tens of thousands a year, its best to protect yourself by purchasing a Medicare Part D drug plan.Medicare part d donut hole

One of the most common reasons that enrollees don’t get their prescriptions filled is because of expenses. There are some obvious health consequences for anyone that doesn’t take their prescribed drugs. No Medicare enrollee should have to worry about refilling their medications because of finances.

If you’re considering the purchase of a Medicare Part D prescription drug plan – or if you already have this type of Medicare drug coverage – it’s probable that you’ve heard a term that is referred to as the Medicare “donut hole.”

This term refers to the prescription drug benefits that are provided by Medicare Part D with regards to costs that need to be paid out-of-pocket – at least until a certain portion of your medications have been paid for.

How Medicare Part D Can Help With Prescription Medication Costs

Medicare Part D can help enrollees in paying for the high cost of prescription medications. Anyone who is enrolled in Medicare – regardless of health status or income – is allowed to enroll in Part D.

In addition to helping to defray the high cost of medication, this part of Medicare can also help its enrollees by allowing greater access to drugs that could be useful in the prevention of certain illnesses and disease complications – essentially lowering their overall future health care costs.

Part D plans are provided by private insurers that are approved by Medicare. One reason that these plans are offered is because many of the medications that are used in hospitals may not be covered in Medicare Part A or Part B for enrollees.  You can also get this kind of coverage through a Medicare Advantage plan, but that would replace all of your traditional Medicare coverage.

What Exactly is the Medicare Part D Donut Hole?

The Part D donut hole is actually the benefit coverage “gap” that falls between the initial limit of benefits and the amount of catastrophic coverage that is provided. For example, after the enrollee in a Medicare Part D prescription drug plan exits the initial amount of coverage in his or her benefit plan, they are then responsible for paying a higher amount for their medications until they reach what is known as the catastrophic coverage threshold. It is the period in between coverage that is referred to as the donut hole.

Once a Medicare Part D enrollee has reached the donut hole, he or she will typically be eligible to receive discounts on their covered brand name prescription medications. This can happen regardless of whether the medications are purchased in person through a pharmacy or via a mail order option. The enrollee could also be eligible for some Medicare Part D coverage on generic medications as well.

It is important to note that because each of the Medicare Part D prescription drug plans may have differing negotiated amounts on drug retail prices, it is possible that some Part D enrollees may reach the donut hole at different times than others.

On a positive note, thanks to some changes in the laws, the donut hole will slowly be closing each year. Getting smaller and smaller until it no longer exists. If everything continues to track as it should, the donut hole will be completely gone by the year 2020.

Keeping Track of Your Prescription Medication Expenses

Typically, you won’t be responsible for tracking your costs in terms of when you are “entering” and “exiting” the Medicare Part D donut hole, as this is the responsibility of your Medicare plan provider.

Each month, you should receive a statement that is titled as your Explanation of Benefits that provides you with an overview of what you have spent, as well as how close you are to your “donut hole” entry and exit points.

It’s vital that you understand the donut hole and the implications of it. The infamous coverage gap could cost you hundreds of extra dollars in prescription costs. If you have any questions about Part D coverage or the donut hole, feel free to contact our agents at any time and we can answer those questions for you.

If prescription expenses aren’t your main concern, but you still want additional insurance coverage that isn’t offered by Medicare, a Medigap policy could be perfect for you. These supplemental plans are run by private insurance companies and offer coverage beyond original medicare and pays for things medicare doesn’t.

These ten plans are an excellent tool to protect yourself against expenses like foreign medical emergency expenses, Medicare Part B excess charges, and much more. If you want the most supplemental protection that you can get, Medigap Plan F is a great option that will cover all of the gaps in Medicare.

As you can see, there are several different ways that you can offset expensive health care expenses like prescription drugs or other services. Every Medicare enrollee should be able to afford the health care that they deserve without having to worry about their budget. Reach out today!

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