Covered California and ACA related questions from consumers, employers and agents are answered by Phil Daigle with the best information available at the time. Archived entries may no longer be accurate as the ACA and Covered California knowledge-base is evolving quickly. TO REQUEST A PERSONAL RESPONSE INCLUDE EMAIL ADDRESS.

Need Help with Doughnut Hole

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Question: I have prescription drug coverage under Medicare and will be hitting the "doughnut hole" pretty soon. What will the new healthcare bill help me pay for my drugs?

Answer: Under the Medicare Part D program, seniors pay 25% of their drug costs up to $2,830 a year. After that they pay 100% until their out-of-pocket total reaches $4,550, at which point catastrophic coverage kicks in and seniors pay just 5% of the cost for the rest of the year. The gap between the yearly limit and the point where catastrophic coverage kicks in is called the "doughnut hole."

In 2010, seniors who reach the coverage gap will be eligible for a $250 rebate. Starting in 2011, the government and pharmaceutical makers will begin phasing in subsidies and discounts on brand-name and generic drugs purchased in the gap. By 2020, this program will have eliminated the gap entirely by covering 75% of seniors' drug costs up to the catastrophic coverage limit.

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