People who are using Medicare are about to see some changes being made. The good news is that the changes will result in better coverage for the Medicare prescription drug plans. The bad news is that these new changes will also result in an increase in the cost of premiums.
The average monthly premium that a person who is using the Medicare drug plan will pay in 2011 is about to increase. The average cost increase might be $30.00 a month. In some cases, it could be even higher. More specific details about this increase will become available on Medicare’s plan finder when the open enrollment season begins this fall. People who are currently using Medicare should check over their current plan, in order to avoid being surprised by unexpected rate increases.
The good news is that seniors who have the Medicare drug prescription plan, and who spend a lot of money on their prescription drugs, will be getting some help. Part of the reason for these upcoming changes is in regards to the infamous Medicare “doughnut hole”.
When a person first joins a Medicare prescription drug plan, the person must pay a deductible, which could be up to $310, before the prescription drug plan will start to cover the cost of prescription drugs. After the deductible has been paid off, Medicare will cover 75% of the covered prescription drug costs. Once a person reaches $2,830 in total drug costs, Medicare suddenly stops paying for the costs of prescription drugs. Medicare will not pick up the costs again until after the person pays a total of $4,550 out of their own pocket, for their prescription drugs. This gap is what has been called the “doughnut hole”. You had coverage, then you didn’t have coverage, then you had coverage again.
A new health care law is working towards closing the “doughnut hole” coverage gap slowly, until it is finally closed sometime in 2020. At first, people who use Medicare and have fallen into the gap will get a 50% discount on brand name drugs, and 7% off of generic drugs. The discounts are going to increase as the doughnut hole closes. As these changes are going on, it might become more economical for a person to use a Medicare Advantage plan, which combines medical coverage and prescription drug coverage.
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