Dealing with the Medicare “Donut Hole”

Disclaimer: Results are not guaranteed*** and may vary from person to person***.

Ever since the Medicare Part D prescription drug plan rolled out in 2006, many seniors have been facing costly myriad concerns and issues over what has been labeled as the “donut hole.” The hole, or gap in coverage that leaves it up to individuals to cover a portion of their prescription costs, affected between three and seven million beneficiaries in 2006, leaving many in a tight financial spot. It turns out that the estimate will rise in 2007.

 So what can Medicare beneficiaries do about this costly and often very frustrating problem?

 According to The Journal of the American Medical Association (JAMA), there are steps you can take to avoid falling into the donut hole. The first step? Careful planning and consulting with your doctor about your current and future medication needs in order to see what the most fiscally conservative options are for you. While it’s up to you to decipher Part D, experts have noted that having a strong relationship with your doctor — who you can consult with when it comes to the medications you are taking — can be very advantageous.

 So how does the donut hole occur, exactly? Essentially, in the standard version of Part D (for 2007), you are responsible for an initial deductible of $265. After that, you are responsible for 25% of the following $2,135, which translates to $534 in medication costs. This is where the donut hole happens — you are required to pay out of pocket for the next $3,051 in drug costs. So, that basically translates to you paying out $3,850 of the initial $5,451 in drug costs — this includes premiums as well. Once you surpass the $5,451 mark, you only pay five percent of your drug expenditures.

 To say that these are staggering costs for most seniors is an understatement. Many seniors in the U.S. are living on either a pension and/or their retirement savings, which are being eaten away at by their rising medical costs. This is even more difficult for those seniors who do not have any drug coverage or who have traditional drug coverage that may include tiered co-payments.

 So what can you do to prevent falling into the donut hole? For starters, as I already mentioned, your doctor is an excellent resource. He/she can help you forecast your medical needs for the upcoming year and can help you choose alternate or less costly options, such as various therapies or prescriptions for generic drugs. He/she can also help you eliminate drugs or therapies that you may not need to take, which will also help you to reduce your costs. You can also look into Medicare’s “Extra Help” program and see if you are eligible to have your costs subsidized. Check out or call (800) MEDI- CARE for more information.

 You can also try going the generic route with your drugs. Your doctor can switch certain brand-name drug prescriptions for generic ones. Plus, you can check to see if your pills can be scored (split in half by your doctor or pharmacist) if the dosage allows for it. Plus, check out what is available south of the border — many Canadian pharmacies can provide you with the same drugs you are taking at a much lower cost than the American alternatives.

 Finally, see if you can apply to various federal or state assistance programs, if you are eligible, as they can help with funding. These include such organizations as federally qualified health centers, the Veteran’s Affair system, and various state discount programs that are being offered to individuals.