HR3590 Health Care Bill & Government Health Insurance

A post on HealthCare.gov by Jonathan Blum, Deputy Administrator and Director for the Center of Medicare at the Centers for Medicare and Medicaid Services, explains what the Medicare “donut hole” in the Part D program is all about, in response to the request of website readers for more information.

One cannot appreciate the “donut hole” without having a basic knowledge of what Medicare is. Instituted forty-five years ago, Medicare is a health insurance program for Americans who are aged 65 and older and those who are under 65 but suffer from certain disabilities, as well as those who suffer from End-Stage Renal Disease (permanent kidney failure). Americans who are eligible for Medicare are given the option to pay a monthly premium that will provide them with coverage for outpatient prescription drugs. This coverage is what is being referred to as Medicare Part D.

The “donut hole” is the coverage gap in the Medicare Part D coverage that is reached when the combined spending of the patient and the plan for prescription drugs reaches the limit of $2,800. While in this coverage gap, the patient becomes fully responsible for the full cost of prescription drugs, until the total amount spent on drugs reaches the annual out-of-pocket spending limit of $4,550. Once this yearly spending limit is reached, the patient is only responsible for the small amount of the cost of medicines – usually around 5 percent.

With the Affordable Care Act, changes to Medicare will be instituted to relieve those who hit the “donut hole” each year. This year, those who enter the donut hole will receive a one-time rebate check of $250. By year 2020, this donut hole – the coverage gap – will eventually be closed.