Monday, June 07, 2010

$250 Medicare checks begin to be issued

According to CNN Money, one of the first tangible effects of the health care reform law is the fact that the government has begun to mail out $250 checks this week to seniors who fall within Medicare’s gap for prescription drug coverage. Checks will continue to be mailed to seniors falling within this category throughout the year.

The gap or “donut hole” occurs when a senior citizen’s prescription drugs cost too much to be paid for through basic Medicare coverage, but aren’t expensive enough to qualify for other coverage. In addition to a $310 deductible, Medicare beneficiaries pay 25% of their drug costs until the total reaches $2,830 for the year. Then, they fall into a coverage gap. At that point, enrollees must pay all costs out of pocket until their annual expenses exceed $6,440. After that, seniors pay 5% of drug costs for the rest of the year.

What’s the plan for 2011? Seniors who fall into the ‘donut hole’ will receive a 50% discount on brand-name drugs. The discount for generic drugs will be 7%. Those figures will rise over the years, eventually reaching a total 75% discount that effectively will eliminate the gap in 2020.

So, what do you think about this aspect of the health care law…will it really help?

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