Ask the Medicare Specialist

QUESTION:

From Maureen: Does the Medicare Donut Hole start at the same dollar amount regardless of which Part D prescription insurance you are enrolled in? Also, I thought it was scheduled to go away in 2020. Was I mistaken?

ANSWER:

Unless you have drug coverage through a company you or your spouse retired from and the plan doesn’t implement the Donut Hole, which is rare, it makes no difference what Medicare Part D company you have for prescriptions, be that a Stand-Alone plan that those with Supplements purchase, or drug coverage that comes with an Advantage Plan HMO or PPO. The Donut Hole starts at the same time, once you have received $4,020 worth of medications. For example, a common brand name diabetic drug, Tresiba, has an average retail cost of $500 for a month’s supply. A person who took only Tresiba would fall into the Donut Hole after eight months. If he or she was taking other medications, it would happen earlier. Once in the Donut Hole, people go from paying a co-pay of $35 to $45 for a 30-day supply of brand name medications to paying 25% of the retail cost. In the case of Tresiba, that would be $125. Some may move out of the Donut Hole into what is known as the Catastrophic Stage at which time medications become less expensive, but not before they had spent upwards of $2,300 out of their own pocket. In addition, the cycle starts all over again every January so most people who reach the Catastrophic Stage usually see relief for only a month or two. As for the second part of the question, we were indeed told that the Donut Hole was going away in 2020 per the Affordable Care Act. It did not. My take is this was a game of semantics played out by politicians and the Centers for Medicare and Medicaid (CMS) to throw us off the scent of their collusion with Big Pharma. 2012 saw the first year of discounts for those who fell into the Donut Hole. They started at 25% and were gradually increased to the maximum, 75%, last year. Prior to 2012, once in the Donut Hole, the entire cost had to be covered by the Medicare beneficiary, so the discounts sound great. Right? Wrong. What happened was as the discounts increased, so did the cost of medications. Brand name drugs that retailed for $125 for a 30-day supply in 2012 are now $500. The amount those pay today, even with the 75% discount, is the same as the entire cost was in 2012. And because medications have increased so much, hundreds of thousands more people are finding themselves in the donut hole than ever before I’ve written my opinion regarding the lack of transparency on this subject previously. It’s a travesty played out by politicians on both sides of the isle at the expense of one of our most vulnerable group of citizens, seniors on a fixed income, all at the benefit of Big Pharma. I find it appalling and a story that’s been completely ignored by the media. I doubt that’s a coincidence either since pharmaceutical companies purchase such massive blocks of advertising on all virtually all tv networks and channels, including the 24/7 news outlets. All we can do is be smart consumers at the end of the day. The Health Insurance Store can determine if you qualify for PACENET or Patient Assistance programs that offer greatly reduced or free medications. I have discussed these in several recent columns, webcasts, and podcasts that can be found on our website if you would like more information. One other suggestion. Make sure you’re not making the common mistake of remaining on the same Stand-Alone Part D plan or Advantage Plan year after year without having it professionally evaluated each Annual Election Period (AEP), which runs October 15th to December 7th. Stand-Alone Part D plans not only increase premiums, they can also raise deductibles and co-pays, move your drugs up the “tier ladder”, remove drugs from their formulary, and more. Failure to move to another plan or company when any combination of these occur can result in the overpayment of up to $1,000. We see people making this error far too often. Advantage Plans historically have not had nearly the changes we’ve seen with Stand Alone Part D when it comes medications costs and tiers. In fact, there has never been deductibles for Part D medications with HMO’s and PPO’s in our region. However, there can be other increases in the form or higher medical co-pays or Maximum Out of Pocket (MOOP) costs. In addition, ancillary benefits that people count on like dental can be eliminated year to year. It’s vital that those who have had the same HMO or PPO for years also have their plan evaluated. If you would like to receive our recommendation letter we send to our Stand-Alone Part D and Advantage Plan clients prior to every AEP, you can call or email us with your plan and address information. This ensures you always choose or remain on the plan that offers the best possible value in terms of premiums, co-pays, benefits, and total out of pocket costs. Like office, phone, or Zoom consultations, this is a service we provide at no cost.