Tuesday, August 15, 2006


XLPharmacy Canada - Medicare Saga Continues

What Is This Infamous Doughnut Hole In Medicare I Hear About?

The hole is a gap in coverage that Congress built into Medicare's first-ever prescription plan. The gap requires most people with drug expenses over $2,250 to pay 100 percent out of pocket before coverage resumes when they reach the $5,100 level.

Millions of beneficiaries like this one are going to have to find a way to get past Medicare's infamous doughnut hole. It is estimated that about 3.4 million beneficiaries, or about 8 percent of those enrolled in the plan, will fall into the gap this year.

Under the standard Medicare benefit, people generally have to pay a $250 deductible and 25 percent of drug costs up to $2,250. When costs paid by both the plan and the beneficiary reach that $2,250 figure, the beneficiary will have to pay all drug expenses until their total out-of-pocket expense reaches $5,100 -- generally a $2,850 gap. After that, they will be covered again for all but 5 percent of drug costs.

Does This Doughnut Hole Affect Everyone?


More than a third of Medicare recipients get their prescription coverage through an employer or other program and are not subject to coverage gaps. Some recipients chose higher-cost drug benefit plans that provide some coverage through the gap. Others don't purchase enough drugs to reach the spending limit. Also shielded from the doughnut hole are low-income people who qualify for Medicare subsidies. As well as those who receive their prescriptions through both Medicare and Medicaid.

Medicare's prescription drug coverage gap has been well publicized. Still, many seniors are unaware of it, don't fully understand it or hit it sooner than they expected. Others don’t realize it until they begin receiving warnings from their plans that they are nearing their spending limits. While still others are discovering a doughnut hole only when they visit the pharmacy and find their $25 prescription drug co-payments replaced by bills for hundreds of dollars. Talk about a rude awakening.

Once most people reach the doughnut hole they won’t be able to get out of it, because if people hit the gap more than halfway through the year, they are unlikely to reach the spending threshold before their policy finishes at the end of the year. The idea of having to continue paying premiums for almost no coverage irritates a lot of seniors.

What Choices Are There If This Happens To Me?

Some Tips To Consider:

Information on the side of Canadian Pharmacies and US Insurers: Insurers contract with specific pharmacies. They will count only those purchases made in their network in calculating when a beneficiary has reached the hole. Additionally, drugs purchased through Canadian or other international pharmacies don't count. You will have to consider the in-pocket savings when considering Canadian Pharmacies. If you know you will not be climbing out of the “doughnut hole” before the end of the year, this may be a viable and more affordable solution, as Canadian Pharmacies have a cap on their medication costs and purchase their medications from the same International pharmaceutical manufactures as the U.S. such as Novartis, Cipla Abbot, Aventis, Bayer, Dr. Reddy's, Merck, Lilly, GlaxoSmithKline and Ganbaxy

Informational Resources:

XLPharmacy Canada
MSN Health Blogs
WordPress Health Blogs I
WordPress Health Blogs II

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