Medicare Donut Hole Grows Smaller

If you or someone you love is on Medicare, then you’ve probably heard about the“doughnut hole”. 

The “doughnut hole” is the gap in Medicare’s coverage for prescription drug costs.

Medicare Plan D is the plan which offers prescription drug coverage to Medicare beneficiaries but the plan has become infamous for what is commonly known as the "doughnut hole".

The "doughnut hole" is a gap where a Medicare beneficiary becomes 100% responsible for payment of medication costs once the limit of $2,930 in prescription costs has been reached.

The good news is that changes are underway to help Medicare beneficiaries meet and manage prescription drug costs.

 First, a new benefit has been added in 2012 which allows Medicare beneficiaries to get a 50% discount on brand-name drugs and a 14% discount on generic prescriptions.

 Once the out-of-pocket cost of $4,700 is met by the Medicare beneficiary, then individuals can qualify for another level of assistance which will limit prescription drug costs to 5% of  annual prescription drug costs.

 Even better news is coming…The Affordable Health Care Act of 2010 has set out a plan whereby the doughnut hole will become smaller over the coming years and by the 2020, the doughnut hole will have disappeared.