I've learned a lot while visiting with family this week about the Medicare Part D "doughnut hole" or "donut hole". (It doesn't matter how you spell it and I used both in this diary so you will be familiar with how interchangeable the spellings are.) The donut hole might as well be a black hole because once you find yourself in it, the drugs you need are there, but tantalizingly, just out of reach...and those life saving drugs stay there for a long time - months at a time.
Few healthcare professionals understand how devastating this ridiculous donut hole can be. The prevailing attitude is that anyone finding themselves in the donut hole is a statistical outlier. Someone who is very ill and an unusual case. That attitude by healthcare policy makers is short sighted and wrong. They don't get it.
Anyone making a living in our bloated healthcare system would be shooting themselves in the foot to admit that Medicare Part D is a shameless, thinly disguised bailout of both pharmaceutical and health insurance company profits.
2008 Medicare Part D Coverage Gap and Catastrophic Coverage figures:
Coverage Gap - Medicare drug plans may have a "coverage gap," which is sometimes called the "donut hole." A coverage gap means that after you and your plan have spent a certain amount of money for covered drugs (no more than $2,510), you have to pay out-of-pocket all costs for your drugs while you are in the "gap." The most you have to pay out-of-pocket in the coverage gap is $3,216.25. This amount doesn't include your plan's monthly premium that you must continue to pay even while you are in the coverage gap. Once you've reached your plan's out-of-pocket limit, you will have "catastrophic coverage." This means that you only pay a coinsurance amount (like 5% of the drug cost) or a copayment (like $2.15 or $5.35 for each prescription) for the rest of the calendar year.
Note: If you get extra help paying your drug costs, you won't have a coverage gap. However, you will probably have to pay a small copayment or coinsurance amount.
Catastrophic Coverage - Once your total drug costs reach the $5,726.25 maximum, you pay a small coinsurance (like 5%) or a small copayment for covered drug costs until the end of the calendar year.
Although $2,510 is a fair amount of money, it doesn't take much to put you into the donut hole. All you need is to have high blood pressure and arthritis, high blood pressure and diabetes. Hyperlipidemia is a complication often associated with diabetes or high blood pressure. Lupus will send you into the donut hole as will asthma, allergies or GERD. Heaven help you if you have fibromyalgia or get bouts of bursitis. In short, just get sick, but whatever you do; don't get depressed (it could cost you $78.03 per month or $936.36 per year).
Nexium and Lipitor are 2 of the most prescribed drugs in the US today. Lyrica has been used for epilepsy and nerve pain and now it's used for fibromyalgia. The retail costs before reimbursements are:
Nexium (standard 40 mg) is $149.33 for a 30 day supply or $1791.96 for the year.
Lipitor (standard 20mg) is $111.04 for a 30 day supply or $1,332.48 for the year.
Lyrica (standard 50mg) is $60.61 for a 30 day supply providing you take 1 a day for fibromyalgia (some people take more) or $727.32 for the year.
If you are a diabetic Glucophage or it's generic, Metformin 500 mg tablets are the most commonly prescribed drugs:
Glucophage - $31.48 for 30 (if you only need 1 a day) or $377.76 for the year.
generic Metformin - $7.53 for 30 or $90.36 for the year.
If you are on the risky Avandia - $104.01 for 30 and $1,248.12 for the year.
If you have asthma:
Singulair - $102.91 per month and $1,234.92 for the year.
Medicare Part D is the most complex of all of Medicare's offerings. It misses the mark spectacularly. Part D for drugs?....that's about as sensible as this program gets. It's down hill from there. Medicare Part D is needlessly complex. When you go to the CMS.gov site and search for Medicare you get an assortment of links. When you look for Part D, you get more links. it's not simple.
If you want to know the number of plans in your area, you can use this look up screen. I went through the look up for Broward County Florida. There are 58 different plans with deductibles that vary from $0 to $275. The premiums vary from $12.10 to $97.50 per month. They also vary in donut hole coverage. Most offer no gap coverage, some offer generics or some generics or preferred generics. To know for sure, you need to select a plan and view the formulary and make sure the drugs you take are on it (I selected AARP's plan because nyceve has pointed out AARP's obvious bias). The problem is that when you click the link to see the drug formulary - you don't get to see it, you need to use the look up I linked to and spend hours checking out your drugs - one by one. You could need to call the 800 number for each plan to find out if your drugs are covered, but expect the customer service rep to be less than helpful.
Medicare recipients want a simple, easy to understand pharmacy benefit. What they get is a confusing array of choices and they don't know where to click first. The government knows this program isn't as good as it should be. They even have created a page to help you lower your drug costs when you hit the doughnut hole.
If you think only people who are really ill have to deal with the donut hole, you'd be wrong. Far too many people fall into it around September - just in time for the holidays. Several members of my and my husband's family are skimping on drugs in November, December,... skipping doses, waiting for January to start the cycle over again.....but wait, there's the deductible! There will be no relief until February. If your income warrants it, you might be able to file some papers to get an exception and a hardship exemption to give you better drug coverage, but you have to figure out how to do it.
This website does a credible job at explaining the Medicare Part D benefit in language that most people can understand.
In making these determinations, beneficiaries need to take into consideration two important calculations. The first is the calculation of the initial coverage limit. A beneficiary who reaches the initial coverage limit falls into the "doughnut hole" or coverage gap and becomes responsible for the total costs of all medications. The statutory standard initial coverage limit is $2400 for 2007 ($2,510 in 2008). This amount is reached by taking into consideration the full cost of the drugs, not just the beneficiary’s out-of-pocket cost-sharing. For example, if a drug costs $150 and the beneficiary’s co-payment is $40, the full $150 counts towards the initial coverage limit.
The second calculation is the beneficiary’s out-of-pocket expenses. A beneficiary who incurs $3,850 ($3216.25 + deductible, excluding premium payments in 2008) in out-of-pocket expenses (OOP) in 2007, which include any deductible, co-payment or co-insurance, will arise from the doughnut hole and become eligible for catastrophic coverage. In the above example, only the $40 paid by the beneficiary is counted towards the OOP limit. Thus, because the OOP limit is based on what a beneficiary pays directly, and not on the total cost of the drugs, a beneficiary who pays less at the beginning of the year will have fewer expenses that count towards the OOP and may take longer to get out of the doughnut hole.
To complicate matters, beneficiaries also need to understand what expenses count towards both of these figures. Payments for drugs that are not on the formulary, for formulary drugs bought at a non-network pharmacy (with some exceptions), or for drugs bought in Canada or another foreign country do not count towards either the initial coverage limit or the OOP limit. Payments made by insurance or employer plans and payments made by AIDS Drug Assistance Programs (ADAPs) do not count towards the $3850 OOP limit.
Ok, so did you get that? There's not a formal test in the traditional sense, but you'll deal with it in the School of Hard Knocks and it's on the Health Care Final. I pray that you have someone in your life to help you with this and I pray that you can figure this out for your family and friends.
One reason a single payer system is so hated by pharmaceutical companies and health insurers is that they will not be able to make a program like this fly. A universal health care system would be simpler than this. If our lawmakers consider Medicare Part D an example of health care reform, we're screwed.
We need real health care reform.
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I went to Costco.com for several reasons.
- They are a legal discount pharmacy for the US.
- Drugs bought in Canada are excluded under Medicare Part D.
- Their web site is easy to negotiate.
- Costco does sell at lower prices than many pharmacies. These prices are some of the lowest people would have access to. Unfortunately, most people will go to pharmacies that charge more - putting them into the donut hole that much sooner.