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New Part D Estimator Gauges When You'll Run Out of Doughnut
- December 20th, 2006
A new cost estimator on Medicare's Web site calculates when enrollees will reach the gap in prescription drug coverage known as the "doughnut hole" under various competing drug plans.
Until December 31st 2006, Medicare beneficiaries are in an enrollment period for Medicare Part D, the new prescription drug program. When evaluating Medicare Part D plans so you can either enroll for the first time or change plans, it is important to determine your potential coverage gap, the 'doughnut hole.' For 2007, the doughnut hole will begin when the senior's drug plan has spent a total of $2,400 for the year. The senior then has to pay for all of the senior's drug costs until the senior's out-of-pocket expenses reach $3,850 for the year, and after that point, the senior has to pay only 5 percent of the additional drug costs. Until October 2006, there was no good way to compare plans to determine when during the year the doughnut hole would be reached under each plan.
The Medicare Web site, www.medicare.gov, now has a cost estimator that can provide monthly and annual spending estimates. The estimates are based on the drugs that seniors take and the pharmacies they use. The cost estimator includes the costs to seniors and to their plans -- the two factors that determine when the doughnut hole will kick in. Seniors will now be able to get a rough idea of when that will happen under each plan in their area.
Seniors have only a few weeks left in the current enrollment period to change plans or to sign up for the Part D benefit. The cost estimator can assist seniors, especially those with high drug costs, in deciding whether to stay with their current plan or to change to another plan. Generally, drug plans that were able to negotiate lower prices with drug manufacturers will have coverage gaps that occur later in the year than plans that pay more for drugs. Plans with later coverage gaps may mean lower out-of-pocket costs for their beneficiaries.
To use the cost estimator, click on the 'Compare Drug Plans' link on the Medicare Web site, then click on 'Find and Compare Plans.' You can then perform either a personalized search or general search for drug costs, and enter the lists or names of the drugs you use. The estimates (shown in chart form with detailed explanations) are at the end of the page, along with the details of the various Part D plans offered in the state. The site is updated every two weeks, and Medicare officials say that the figures should be close to what seniors see after each pharmacy purchase. Seniors should remember that plans can change drug prices during the year, so their actual spending might be higher or lower than estimated.
Timothy P. Crawford, CELA, is an ElderLawAnswers member attorney in Racine, Wisconsin. To visit his home page, click here.
For more on Medicare Part D, click here.
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