Medicare Prescription Drug Donut Hole Update « Health Insurance Advisory

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new healthcare reform lawThe new healthcare law, called the Patient Protection and Affordable Care Act (PPACA), represents comprehensive healthcare reform legislation signed into law on March 23, 2010. It contains numerous provisions designed to protect consumers and promote low cost medical insurance, including many new taxes to pay for the cost.

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Medicare Prescription Drug Donut Hole Update

Author: Administrator | Aug 14 2011 | Medicare

The new healthcare law, called the Patent Protection and Affordable Care Act (PPACA) will eventually close the “donut hole” in the Medicare Part D Prescription Drug Program that limits benefits for seniors with more than $2,250 but less than $5,100 in annual drug costs. In 2011, brand-name drug makers will be required to provide discounts for prescriptions filled through Medicare Part D. Seniors in the Medicare Part D program reaching the donut hole will receive a 50% (fifty percent) discount on brand name formulary drugs and a 7% (seven percent) discount on all generic formulary medications.

[In 2010, seniors in the Medicare Part D program must pay the first $310 for prescriptions before coverage kicks in. For subsequent total drug costs between $310 and $2,830, the government will pay 75 percent and beneficiaries pay 25 percent. Then, starting at $2,830, beneficiaries must pay the entire costs until they hit an out-of-pocket limit of $4,550. That's what's known as the donut hole. After that, "catastrophic coverage" begins, with the government paying 95 percent of costs.]

Medicare will phase in additional discounts over the next 10 years on the cost of both brand name and generic drugs. By 2020, these changes will effectively close the coverage gap and rather than paying 100% of the costs, seniors responsibility will be 25% of the costs.

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