The Doughnut Hole

“After a Medicare beneficiary surpasses the prescription drug coverage limit, the beneficiary is financially responsible for the entire cost of prescription drugs until the expense reaches the catastrophic coverage threshold”.
From Wikipedia

At the monthly visit to the pharmacy my father got a bill for two hundred nine dollars for his Parkinson’s drugs. He was used to paying thirty dollars. He had fallen into the doughnut hole, the time where insurance no longer covers a fraction of the cost of medications. He believes the month is arriving earlier this year, which is possible as the cost of drugs only goes up, which makes arriving at the sum of $2,840, the amount spent by the patient plus the amount spent by the insurance company, occur prior to last year.

However, things could be worse. In 2010 the government sent $250 checks to seniors who had hit the doughnut hole during the 2010 calendar year. In 2011 when patients fall into the doughnut hole they will pay fifty percent of the retail cost of brand name medications. Though there is nothing to dissuade drug companies from jacking up their retail prices. Generic drugs receive a seven percent discount. I doubt my father knew he was actually getting a discount on his drugs.

There is also a program for those who need ‘full help’. Such programs offer smaller copayments for medicine and no doughnut holes. Those on limited incomes can receive ‘extra help’ from the government. Drug costs in 2011 for most people who qualify are about $2.50 for each generic and $6.30 for each brand-name. Qualified Medicare individual beneficiaries must have a monthly income of $923 or less. For a married couple the monthly income limit is $1,235.

Don’t most eighty year olds have limited incomes?

On the far side of the coverage gap, there is another shore. Your toes touch those sands when you have spent $4,550 of your cash. Your insurance retakes your hand, and you pay five percent of the retail cost of medication. The doughnut hole is slated to vanish completely by 2020, nine years from now. Whether my father makes it to the date is questionable, we can only hope.

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