News...
August 30, 2006

Bridging the Coverage Gap on Medicare Drug Plans

PIERRE, S.D.The Department of Social Services wants to remind South Dakota citizens who are enrolled in a Medicare prescription drug plan and have entered or may soon enter the coverage gap, better known as the “donut hole,” they may still be able to continue saving money on drug costs.

“Medicare drug plans are no different than many health insurance plans in that they have limits on how much they will cover on prescription drugs,” stated Department of Social Services Secretary Deborah K. Bowman. “It is important for Medicare recipients to double check their current plan and understand there are ways to save money on prescription drug costs if they enter the donut hole.”

Medicare drug plans provide “catastrophic” coverage if you have an unexpected illness or injury resulting in overly high drug costs. Once you have paid $3,600 out-of-pocket for drug costs during 2006, almost all drug costs above that amount are covered. The coverage gap or “donut hole” is the time between a drug plan’s standard level of coverage and the catastrophic coverage where you pay all of your drug costs.

When entering the coverage gap or “donut hole” you may be able to save money on drug costs while in the gap by:

  • Using your Medicare drug plan card to ensure discounted rates and the money spent goes towards your catastrophic coverage.
  • Asking your doctor about generic or less-expensive brand name drugs.
  • Looking into other sources of “wraparound coverage” from a current or former employer or union. NOTE: Not all types of “wraparound coverage” will count toward the out-of-pocket coverage.
  • Looking into Patient Assistance Programs; Senior Health Information and Insurance Education (SHIINE) can offer free personalized health insurance counseling to people with Medicare.
  • Exploring national and community-based charity programs.
  • Checking into extra assistance; if you have Medicare and have limited income and resources, you may qualify for extra help paying for prescription drugs.

Estimates show that more than 90 percent of people with Medicare either won’t reach the “donut hole” or will have at least some coverage available to them during the gap, according to the Centers for Medicare and Medicaid Services.

Keep in mind the coverage gap works differently for everyone because each Medicare drug plan is structured differently. Everyone has a chance to switch or join a Medicare drug plan once a year. Medicare recipients may want to consider switching to a plan that does not have a coverage gap during their open enrollment period from November 15-December 31 of each year. If joining a plan during this time period, coverage will not go into effect until January 1 of the following year.

For more information on Medicare Prescription Drug Coverage and the “donut hole,” check out the following resources: