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Home Posts tagged "medicare donut hole"
Common Definitions in Medicare and Supplemental Insurance

Common Definitions in Medicare and Supplemental Insurance

By Ed Crowe | General Articles | 0 comment | 7 May, 2023 | 0

 Common Definitions in Medicare and Supplemental Insurance

The jargon around Medicare and insurance in general can feel very inaccessible to potential clients. One of the ways that agents can earn the trust of those clients as well as inform them and help them find coverage that works for them is to know the common definitions in Medicare and Supplemental insurance.

The following are some of the common Medicare-related terms that clients will need to know:

 

Annual Election Period (AEP):

This is the period of time during which people can enroll in, disenroll from, or change their Medicare Advantage, Supplemental plans or prescription drug plans. This is also the period of time in which beneficiaries can return to original Medicare. Choices made during this time period are effective January 1st of the following year.  The time period is October 15th to December 7th.

 

Coverage Gap or Donut Hole:

Not every beneficiary will reach this gap. However, the coverage gap for 2023 begins after the beneficiary and their drug plan have spent $4660 dollars on covered and approved medications. While in this coverage gap, members with higher prescription drug costs will  pay a higher percentage of the cost of their medicine.

 

Deductible:

This is the amount that beneficiaries will pay for benefits before the plan begins to pay for their benefits.  These include medical coverage, including services, prescriptions, and products.

Initial Coverage Election Period:

This is often referred to by its acronym, the ICEP. This is the period of time when a person who is eligible for Medicare can sign up to receive those benefits for the first time. It begins three months before the person’s birthday month, includes the birthday month, and ends three months after the birthday month. It is a seven month period.


Medicaid: It is easy to get confused between Medicare and Medicaid. Medicaid is a program that provides health-coverage for certain low-income people. Most often included are pregnant women, the elderly, and those with disabilities. It is funded jointly by federal and state money.

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Medicare Donut Hole 2023

Medicare Donut Hole 2023

By Ed Crowe | General Articles | 0 comment | 2 May, 2023 | 0

Medicare Donut Hole 2023

The Medicare Donut Hole 2023 is also known as the Part D coverage gap. The coverage gap occurs after the initial coverage period, when the beneficiary’s total drug cost reaches a specified limit. For 2023, the limit is $4,660.00. This cost includes a combination of what the beneficiary AND the insurance carrier has paid, which is why so many seniors can fall into the donut hole. Once people are in the donut hole, or coverage gap, they are responsible for a percentage of the cost of their prescribed medication(s).

 

What happens when the donut hole is reached?

Although beneficiaries are responsible for a percentage of the cost of their medication while in the coverage gap, they typically pay no more than 25% of the cost of approved, brand-name prescription drugs. Some plans offer even lower costs while in the coverage gap. The discount applies to the beneficiary’s plan negotiated pricing that specific drug. Although members pay no more than 25% of the price for the brand-name drug, almost the full price of the drug will count as out-of-pocket costs. This helps get them out of the donut hole faster, because member costs count toward out-of-pocket maximum payments.

How do I get out of the donut hole?

Catastrophic coverage kicks in to cover the costs of medication once a beneficiary has spent $7,400 in out-of-pocket costs. This number includes what the beneficiary pays in covered medication(s) and some costs that are covered by family members, charities, or other persons on their behalf. During this period, beneficiaries will pay significantly lower copays or coinsurance for their approved drugs for the remainder of the year. These out-of-pocket costs that help them reach catastrophic coverage include:

  • Their deductible

  • What they paid during the initial coverage period

  • Almost the full cost of brand-name drugs (including the manufacturer’s discount) purchased during the coverage gap

  • Amounts paid by others, including family members, most charities, and other persons on their behalf

  • Amounts paid by State Pharmaceutical Assistance Programs (SPAPs), AIDS Drug Assistance Programs, and the Indian Health Service

The Medicare Part D plan should keep track of how much money beneficiaries have spent out of pocket for covered drugs and their progression through coverage periods. This information should appear in monthly statements.

Note: Beneficiaries with Extra Help do not have a coverage gap. They pay different drug costs during the year. Drug costs may also be different for those enrolled in a SPAP.

Click here to learn more about Medicare Drug Pricing.

Medicare donut hole 2020

Medicare donut hole 2020

By Ed Crowe | General Articles | 0 comment | 20 February, 2020 | 0

Medicare donut hole 2020

Most Medicare drug plans have a coverage gap or “donut hole”.  If you reach the Medicare donut hole 2020, it means that you have a temporary limit on what your drug plan will cover for your prescriptions.

Some people do not enter the coverage gap/donut hole.  The only time you enter the gap is when both yourself and your drug plan reach the annual spending amount. The Medicare donut hole 2020 amount is $4,020.  This amount applies to only covered drugs in.  This amount may change each year.

Keep in mind; if you are on Medicare and get Extra Help paying for Part D, you will not enter the coverage gap/donut hole.

Want to learn about the Donut hole in 2022; Click this link.

There are 3 levels of coverage with Medicare Part D:

  1.  You are in the initial coverage stage before you reach the coverage gap.  Last year, in 2019, the initial coverage limit was $3,820.  The initial coverage limit has been raised up to $4,020 for 2020.
  2. The second level is when you reach the coverage gap/donut hole. You will be on this level once your Medicare approved prescription drug plan expenses reach the initial coverage limit. Medicare has changed the percentage you pay for your medications during the coverage gap. In 2019, Medicare members had to pay 25% for brand-name prescriptions and 37% for generic medications. The percentage members have to pay for Medicare prescription drug plans in 2020 will be 25% for both brand-name as well as generic prescriptions.
  3. The third level is called the catastrophic coverage level.  You reach this level only if you have reached the annual out-of-pocket threshold.  This amount is calculated by using all the money you paid for prescriptions for the year, including what you pay during the coverage gap.  If you reach this level, Medicare will cover at least 95% of the cost for your medications for the rest of the year.  The out-of-pocket threshold for Part D in 2020 is $6,350.

Important information if you use brand-name prescription drugs:

Once you reach the coverage gap/donut hole in 2020, you will not have to pay more than 25% of the cost for brand-name prescription drugs that are covered by your plan. You will be entitled to this discounted rate if you either buy your prescriptions at a pharmacy or order them through the mail. Certain plans offer you even lower costs when you reach the coverage gap. The discount will come off the agreed price your plan has set with the pharmacy for that specific drug.

Although you pay no more than 25% of the price for brand-name drugs, almost the full price of the drug will count towards your out-of-pocket expenses.  This will help you get out of the coverage gap. In other words, both what you and what the manufacturer pays (95% of the cost of the drug) counts toward your out-out-pocket spending.

If you need help choosing a Medicare Advantage, Medicare supplement of Prescription drug plan, feel free to use our Medicare quoting tool below:

Click here to use our free Medicare quoting tool 

 

 

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Medicare Donut Hole

Medicare Donut Hole

By Ed Crowe | General Articles | 0 comment | 10 May, 2016 | 0

Medicare Donut Hole

‘Medicare Donut Hole’ is another term used to identify the coverage gap in prescription drug coverage.  Most Medicare Prescription (Part D) plans have a donut hole.   This means that after you and your Medicare drug plan have contributed a specific amount of money for your covered prescription drugs, you will have to pay 100% of the cost of your prescriptions up to a given limit.  The limit amount will change each year.

In 2016, once you and your plan have spent $3,310 on covered medications, you will be considered to be ‘in the Medicare donut hole’.  Not every Medicare participant will enter the donut hole.   If the total spent on prescription medications is less than $3,310, there will be no coverage gap.

Once the you have reached the donut hole, Medicare will pay 42% of the price for generic drugs during the coverage gap.  You will be responsible for  paying the remaining 58% of the price.  For covered name brand RX drugs, you will pay 45% of your Part D plan’s contracted cost.  Visit the Medicare.gov site for coverage examples.

 

Medicare recipients meeting certain income and resource limitations may qualify for extra help.  There is no applicable coverage gap or ‘Medicare donut hole’ for those recipients.  Again, visit the Medicare.gov to learn more about extra help.

Also, people with Medicare who get Extra Help paying Part D costs won’t enter the coverage gap.

In 2016, you may qualify if you have up to $17,820 in yearly income ($24,030 for a married couple) and up to $13,640 in resources ($27,250 for a married couple).

If you don’t qualify for Extra Help, your state may have programs that can help pay your prescription drug costs. Contact your Medicaid office or your State Health Insurance Assistance Program (SHIP) for more information. Remember, you can reapply for Extra Help at any time if your income and resources change.

Click here for a free Medicare review and quote.

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