How to Avoid the Medicare Donut Hole

The Medicare donut hole has put a hole in many people's wallets and savings. Medicare Part D, a prescription drug coverage plan for those on Medicare, took effect January 2006. A controversial part of the plan is the doughnut hole gap. The donut hole is a gap in coverage after people have reached a limit on their medications. As of 2010, when the beneficiary reaches $2,830 in total retail prescription costs, there is a gap in the drug coverage until they reach $6,440 in total prescriptions costs or the new benefit year begins. Before the gap begins, a beneficiary already pays out-of-pocket prescription expenses consisting of an annual deductible of $250 + 25% of prescription costs + the average monthly premium. Even after the doughnut hole begins, the beneficiary still has to pay monthly premiums. According to a report by The Institute for America's Future, in 2008, the average Medicare beneficiary falls in the donut hole by September 16th. Although a few of the plans have no donut hole gaps, premiums can be more than 250% higher than drug plans without the gap insurance. In seven states, the difference in premiums was 444%.

Each year 3.4 million people and over 60% of people with diabetes, hypertension, congestive heart failure, and high cholesterol fall into the hole. It's estimated that one in ten diabetics stop taking their medicines. Add to these problems, the cost of prescriptions are rising at exceptionally high rates. According to the University of Minnesota, just during the first half of this year, 17 brand-named drugs increased 100% or more in one price adjustment.

• Do an internet search for the Medicare government site. They have a Prescription Drug Plan finder. Review your Medicare Prescription Drug Plan to see if their are other plans that would be more benefical for you.
• If you can rely solely on generic drugs, you may want to forgo Medicare Part D insurance to save on monthly premiums.
• Use generic drugs whenever possible. The New York Times reported that 25% of individuals could avoid the donut hole if they started the year with generics.
• Try to get free samples if your doctor has them available whenever you can before you reach the donut hole.
• Check into pharmaceutical drug assistance programs.
• Check into state drug assistance programs.
• Some medications are cheaper in Canada and Mexico. If you live nearby either one of the borders, you may want to take a trip across the border to see what medications are cheaper.

If nothing changes, the Congressional Budget Office estimates the donut hole will start at $4000 and end at $9068 in 2013. Considering many of the social security retirement recipients and social security disability recipients are on a fixed income with little or no savings, Medicare Part D gaps in coverage create astronomical hardships. According to AARP, when the donut hole strikes, approximately 15% of these recipients go without medications.

Other than H.R. 3962, America's Affordable Health Choices Act of 2009, I can find no other legislation in the Congress or Senate related to the Medicare donut hole. H.R. 3062 seeks to expand health care coverage to the uninsured by lowering the cost of health care and making the system more efficient. It includes a government run public option for health insurance; a requirement that all Americans have health insurance; and a pre-existing condition ban on health insurance policies. It would be paid for by placing a surtax on all individuals who make more than 500,000 per year. Although this is a controversial bill, one of the things H.R. 3962 would do is close the Part D Medicare donut hole by $500 in 2010 and completely eliminate it by 2019.

This is a tough economy we find ourselves in today. Nearly half of all Medicare recipients have incomes below 200% of the federal poverty level, and more than a third of Medicare recipients have three or more chronic conditions. In a May 2009, a report by AARP revealed that 59% of seniors 65 and older said they found it more difficult to pay for essential items like food, gas, and medicine while slightly less than half found it difficult to pay for heating, cooling, and phone service. The USDA reports that one in five low-income households with seniors don't have enough food to eat a nutritiously adequate diet. Furthermore, it is usually the sickest of the sick that have to make the life-threatening choice between basic necessities and medications since they have either more medications or more expensive medications.To change this situation, the only effective way we have is through voicing our concerns to elected officials and urging them to implement new policies and legislation. Take an active role in America's future, write your elected officials today!