Savvy Senior - "Getting inside the Donut Hole"

July 4

Savvy Senior: Getting inside the ‘donut hole’
By JIM MILLER



DEAR SAVVY SENIOR: In one of your recent columns ("What Healthcare Reform Means for Seniors") you wrote that seniors with a Medicare prescription drug plan could get a $250 rebate check when they hit the donut hole. I've just hit it! What do I need to do to get my check and how long will I have to wait? -- Need Help



DEAR NEED: One of the key benefits for seniors in the new health care reform law is improved coverage for Medicare Part D beneficiaries. Here's what you should know.

This year, seniors who have a Medicare Part D prescription drug plan are automatically eligible to receive a one-time $250 rebate check if they hit the "donut-hole" coverage gap and are not already receiving Medicare "Extra Help." Medicare expects around 4 million Part D beneficiaries will actually hit the donut hole in 2010.

The donut hole begins after you reach $2,830 in total prescription-drug spending and extends until your total drug costs for the year reach $6,440. Within that gap, you generally have to pay the bills out-of-pocket. After that, your Part D plan usually covers 95 percent of your remaining drug costs for the year.

Again, you just need to reach the donut hole to qualify for the rebate. You don't have to spend $250 within the coverage gap first. And you don't need to fill out any forms to get your check. Medicare will automatically send it when you reach the donut hole -- you should receive it within 45 days. To make sure there are no delays, you may want to call your drug plan once you've hit the donut hole, to make sure they've notified Medicare of your eligibility. If you don't get your rebate check, call Medicare at 800-633-4227.

The government also wants to warn seniors about possible con artists who may try to take advantage of the government rebate. If someone calls you claiming to need your personal information, like your Medicare or Social Security number, or bank account so they can process your Medicare rebate check, don't give it to them. It's a scam! Just hang up the phone, and call 1-800-MEDICARE to report it.

You also need to know that starting in 2011, Medicare Part D beneficiaries that hit the donut hole will receive a 50 percent discount on brand-name drugs and a seven percent discount on generic prescriptions. After that, beneficiaries will pay a smaller portion of their drug costs in the donut hole each year until 2020, when they have to pay just 25 percent of those costs.

Also starting next year, individuals who earn more than $85,000 (or $170,000 if married filing jointly) will have to pay a high-income surcharge for Part D Premiums, as they do for Part B.

Another change to be aware of is Medicare's expanded prescription drug benefit to low income seniors (this is not part of healthcare reform). Changes in the law have now made it easier for about 1 million more seniors to qualify for "Extra Help" in paying their Medicare drug coverage.

To be eligible, your annual income must be less than $16,245 for an individual and $21,855 for a married couple living together. And your assets such as stocks, bonds and bank accounts must be limited to $12,510 for singles and $25,010 for married couples. The value of your home and automobiles are excluded.

Under the old law, applicants had to include the value of life insurance policies in calculating their assets. They also had to include as part of their income money received on a regular basis from relatives and friends to help pay household expenses. Under the new law, life insurance policies are no longer counted as assets and money received to help pay household expenses is not counted as income. To find out if you qualify call Social Security at 800-772-1213 or see ssa.gov/prescriptionhelp.