By Nicole Duritz
The dog days of August are the most likely time for Medicare Part D participants to fall into the “doughnut hole” and see their prescription costs rise. With AARP resources, you can see if you’re at risk of falling in, and find options for lowering your drug costs.
The Doughnut Hole
Each year, 19 percent of Medicare Part D beneficiaries fall into the doughnut hole. Once the amount of money you and your insurance company pay for your prescription drugs reaches $2,850, you hit a temporary coverage limit, aka the doughnut hole.
For 2014, you will receive a 52.5 percent discount on brand-name prescription drugs and a 28 percent discount on generics while you’re in the doughnut hole. These discounts will continue to grow until 2020. That’s when the doughnut hole will close for good. This change came about as part of the Affordable Care Act.
How much you pay out of pocket for each drug while you are in the doughnut hole will vary widely depending on the Part D plan you’ve chosen and the price your plan has negotiated with drug manufacturers.
If you use brand-name drugs, the full cost of the drug — what it costs before your discount — counts as your out-of-pocket cost. So even though you would get a $52.50 discount on a $100 prescription while you’re in the doughnut hole, the full $100 counts as out-of-pocket costs. This is important because once you reach $4,550 in out-of-pocket costs, you’re out of the doughnut hole. You’ll then pay up to 5 percent of the cost of your prescriptions for the rest of the year.
A simple way to determine if and when you’re likely to fall into the doughnut hole is by using the Doughnut Hole Calculator at www.aarp.org/doughnuthole. Spanish speakers can go here: http://calculadoramedicare.aarp.org/. The tool also offers recommendations for less expensive drugs for you and your doctor to consider.
Don’t Have Medicare?
If you don’t have Medicare, you’re not thinking about the doughnut hole, but when it comes to prescriptions and over-the-counter medications, your expenses can creep up as the months go by. AARP offers an easy online tool at www.aarp.org/drugsavings that lets you compare your current prescription medications to lower-cost alternatives. Spanish speakers can go here: http://ahorrarmedicamentos.aarp.org. Simply type in your medication to get a list of generics or other similar drugs. Print the list and take it with you to your next doctor’s appointment. It’s worth checking out; the savings can be substantial.
Of course, avoiding doughnuts is also good for your health (pun definitely intended). Now is a good time to take stock of your health care plan to see if it’s meeting your needs and to get those annual appointments on the books for 2015.
Remember to get your screenings and other annual appointments no earlier than one year after your most recent ones. Otherwise, insurance may not cover the visits. Go ahead and get those appointments on the calendar now — even if they are months away. These days, doctors are often booked months in advance.
Get started with making plans for the fall and the year ahead before the pace of the world around us picks back up. And don’t forget to sit back and enjoy some quiet time while you have the chance!
Nicole Duritz is vice president of the health and family issues team in the education and outreach group at AARP. She leads AARP’s educational and outreach efforts on health education issues, including Medicare, the health law, prescription drug affordability, long-term care, and prevention and wellness. She can be reached at firstname.lastname@example.org.
Photo: Courtney Keating/iStock
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