Prior to 2011, most* Medicare Part D enrollees were required to pay 100 percent of prescription drug costs once expenses exceeded $2,830 and until they reached $4,550 (catastrophic coverage). This gap in coverage is often referred to as the "donut hole.” The health care reform law has a structured plan to fill the "donut hole" gap.
- Beginning in 2011, Part D enrollees who reach the gap will get a 50 percent manufacturer discount on the total cost of their brand-name medications.
- Beginning in 2013, a portion of the cost of brand-name medications in the gap will be covered. (This is in addition to the 50 percent discount.) By 2020, this will reach a total benefit of 75 percent coverage, including manufacturer discount.
- Beginning in 2011 through 2020, Part D will also cover a portion of the cost of generic medications in the gap, reaching 75 percent by 2020.
- The actual out-of-pocket amount paid to become eligible for catastrophic coverage will be reduced by the amount of current manufacturers' discounts.
- In addition to the Part D gap adjustments, the Retiree Drug subsidy paid to employer plan sponsors becomes taxable income beginning in 2013.
This provision is part of the health care reform law, also known as the Patient Protection and Affordable Care Act (PPACA).
For more information on health care reform, visit www.healthcare.gov or www.uhc.com/reform.
*A typical exception is employer group Part D plans.
This communication is not intended as legal or tax advice. Please contact a competent legal or tax professional for personal advice on eligibility, tax treatment and restrictions. Federal and state laws and regulations are subject to change.Prior to 2011, most* Medicare Part D enrollees were required to pay 100 percent of prescription drug costs once expenses exceeded $2,830 and until they reached $4,550 (catastrophic coverage). This gap in coverage is often referred to as the... More