If you aren’t familiar with Medicare, it is a health insurance program for people 65 or older, people under 65 with certain disabilities, and people with End-Stage Renal Disease (permanent kidney failure). People with Medicare have the option of paying a monthly premium for outpatient prescription drug coverage. This prescription drug coverage is called Medicare Part D and it has been one of the most misunderstood pieces of the Medicare puzzle for years.
In 2015, basic Medicare Part D coverage works like this:
- You pay out-of-pocket for monthly Part D premiums all year.
- You pay 100% of your drug costs until you reach the $310 deductible amount.
- After reaching the deductible, you pay 25% of the cost of your drugs, while the Part D plan pays the rest, until the total you and your plan spend on your drugs reaches $2,800.
- Once you reach this limit, you have hit the coverage gap referred to as the “donut hole,” and you are now responsible for the full cost of your drugs until the total you have spent for your drugs reaches the yearly out-of-pocket spending limit of $4,550.
- After this yearly spending limit, you are only responsible for a small amount of the cost, usually 5% of the cost of your drugs.
You may have read in the 2015 Medicare & You Handbook that there are some Medicare Part D plans that offer coverage in the donut hole – but these plans may charge a higher monthly premium. (There are also some Part D plans that are “enhanced” and offer fixed co-pays (for example $5, $10, and $20) for prescription drugs instead of the deductible and 25% cost-sharing that was described above. These plans also may charge a higher monthly premium.)
- Starting in 2011 and again in 2013, those in the Donut Hole were eligible for a 50% discount on brand-name drugs in the donut hole, and they began paying less for generic Part D drugs.
- By 2020, the coverage gap is expected to be closed, meaning there will be no more “donut hole,” and you will only pay 25% of the costs of your drugs until you reach the yearly out-of-pocket spending limit. The downside? Well, right now, we’re in 2015.
For our friends that are – or have been – struggling in the Donut Hole, we have one suggestion. Read up on it, and then, when you realize just how complicated that can really be, reach out to us. The easiest and safest way for you to secure your healthcare benefits under Medicare remains through a trusted and local health insurance agent – like us! Reach out to us at (615) 541-4257 or, contact us online! Either way, we’re here to make the transition as easy as possible for you and to guide you through this important time.
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At HealthTN.com we have been serving families in Middle, East and West Tennessee for the last 5 years as an extension of Continentalha.com. Our agents are from every corner of the state ready to serve all areas in East, Middle and West Tennessee. Our home office is currently located in Nashville, TN.
