The federal health care overhaul delivers deep price cuts this year that will benefit Medicare prescription drug customers who fall into a coverage gap known as the "doughnut hole." But limited coverage still may pose a financial challenge for a few more years.
The Medicare drug benefit known as Part D has saddled customers who have hefty prescription bills with a big chunk of uncovered expenses every year since the plans entered the market in 2006.
Here's how the doughnut hole works: This year, customers and their drug plans must spend $2,840 before they reach the coverage gap. Then beneficiaries alone pick up the next $3,608 in costs before they become eligible for catastrophic coverage, when the plan covers 95 percent of costs.
Congress created this gap essentially to keep prescription drug spending within a budget, while offering both upfront coverage and protection against overwhelming expenses. The overhaul then took a step toward filing the gap last year, when it provided $250 checks to those who reached the doughnut hole.
This year, customers will receive more help. Companies that make brand-name pharmaceuticals are providing 50-percent discounts, and plans that offer Medicare Part D prescription drug coverage will pick up 7 percent of the cost of generics.
1. Who will this year's discount help most?
Patients who take expensive brand-name drugs will receive a big boost because the discount slices their doughnut hole bills in half.
Many patients take drugs with no generic alternatives, and their expenses can add up fast. Part D plans rarely offer brand-name drug coverage in the doughnut hole, said Jocelyne Watrous, an advocate with the non-profit Center for Medicare Advocacy who helps people with prescription drug plans.
Roughly one out of every four Medicare Part D beneficiaries reaches the doughnut hole, according to 2008 study by the non-profit Kaiser Family Foundation. Many reach it around the middle of the year.
2. What are some ways to manage costs left uncovered in the doughnut hole?
Part D customers should check with their plans for mail-order prescription discounts. Some may offer a three-month supply for the cost of a two-month supply.
Drug companies also may provide a price break for Part D beneficiaries who hit the doughnut hole, but pay attention to the details of their patient assistance programs. Discounts may be based on income or insurance levels.
Part D subsidies that eliminate the doughnut hole also may be available for customers with low incomes.
3. Who can customers turn to for help with finding discounts?
Part D beneficiaries should take a list of the drugs their plan covers to their physician to see whether some brand-name medicines can be switched for less-expensive generics.
Contact a State Health Insurance Assistance Program, or SHIP, office. There are locations in every state plus Washington, D.C., Guam, Puerto Rico and the Virgin Islands, and they offer free counseling for Medicare beneficiaries. Visit www.shiptalk.org for a list of offices.
4. Can Medicare prescription drug customers do anything to prepare ahead of time?
Patients should talk to their primary care doctor every year about their current prescriptions to make sure they're all still necessary.
They also should compare their drug plan every year with other Part D plans. This is particularly important for patients who are notified that their plan rates will change.
"Those plans change annually, and they could be really big drastic changes," said Mary Johnson, a Medicare policy analyst with The Senior Citizens League, a non-profit advocacy group. She noted that premiums can sometimes double.
Coverage of some drugs also may change or be dropped entirely from year to year.
The Medicare drug plan finder website can help with this at https://www.medicare.gov/find-a-plan/questions/home.aspx .
5. Will the overhaul eliminate the dreaded doughnut hole?
The federal overhaul will gradually close the coverage gap between now and 2020. By then customers will pay 25 percent of the cost of both generic and brand-name drugs in the coverage gap. That is the standard cost-sharing for drugs before a patient hits the doughnut hole.