Checks to 'Donut Hole' Medicare Members Begin This Week

Published: Thu 10 Jun 2010

Thomas Kristoffersen

Checks to 'Donut Hole' Medicare Members Begin This Week

Tax-free, one-time rebate checks for Medicare members classified in the Part D "donut hole" will start going out today.

The $250 rebate will go to 80,000 Medicare recipients in the first mailing. The rebate represents one of the first real results of the new health care reform law, formally known as the Patient Protection and Affordable Care Act, Congress passed on March 21 and President Obama signed into law on March 23.

"This is an important first step toward closing the Medicare donut hole," commented Representative G.K. Butterfield, a Democrat from North Carolina. From now until the year 2020, the government will work on closing the gap.

Approximately eight million of the 25 million beneficiaries of Medicare Part D have prescription drug expenses that force them into the area uncovered by Medicaid. These seniors would then have to absorb $3,610 in prescription medication costs before coverage resumes. The average senior who falls into the donut hole will save over $700 in 2011.

Understanding the Gap

The majority of Medicare prescription medication plans have a gap in coverage that starts when the total retail cost of prescription drugs, not the out-of-pocket expense, purchased by a beneficiary hits $2,830. These members have already paid the $250 deductible and made co-payments included in that total, and when that time comes, they must pay for all prescription expenses up to $4,550 before Medicare prescription coverage kicks in again.

As Medicare members enter the donut hole, the government will mail checks as necessary throughout the year.

Medicare recipients can expect to automatically get a check within 45 days of falling into the "donut hole" unless they are currently receiving Medicare Extra Help.

Representative Walter Jones, who voted against the health care reform bill, said "I do believe seniors are hurting. If there is a way to help them with their drugs, I'm all for helping them. This is a difficult time and we've got to help do something to make it better."

A Costly Fix

However, Jones noted, the health care law in addition to the $7-billion-per-month war in Afghanistan is "all borrowed money. There will come a time of reckonin'," he said. "I read on the news wires today the president has asked every agency to look at a five-percent cut across the board," he added.

The country is spending more than it is taking in, and Social Security reserves are dwindling much faster than expected, Jones pointed out.

Rep. Butterfield has urged seniors to beware of scam artists fishing for personal information under the guise of sending out the Medicare Part D rebate check.

"Medicare sends the check automatically, and there are no forms to fill out," he explained. "Don't give any personal information - Medicare, Social Security or bank account numbers - to anyone who calls about the rebate check."