Marci's Medicare Answers: March 2014
If you have a Medicare Part D plan, also known as a Medicare prescription drug plan, the doughnut hole is the period of time during which the cost of your prescription drugs suddenly increases. In 2014, you enter the doughnut hole when your total drug costs (i.e. what you and your Part D plan have paid towards your prescription drugs) reaches $2,850. After both you and your plan have paid this amount toward your drugs in 2014, you will most likely fall into the doughnut hole and have to pay more for your drugs. You get out of the doughnut hole and pay significantly less for your drugs after you have paid a certain amount out of your own pocket since the beginning of the year. In 2014, you get out of the doughnut hole after you have paid $4,550 out of your own pocket since the start of the year for drugs covered by your Part D plan.
Before the ACA, people had to pay for the entire cost of their prescription drugs while they were in the doughnut hole. The ACA gradually closes the doughnut hole, meaning that in 2014, you will only be responsible for paying 47.5 percent of the cost of brand-name drugs and 72 percent of the cost of generic drugs if you are in the doughnut hole. By 2020, the doughnut hole will be completely closed, and you will not have to pay more than 25 percent of the cost of your Part D-covered prescription drugs at any time during the year.
One very important thing to keep in mind is that Health Insurance Marketplaces, also known as Health Insurance Exchanges, do not affect people with Medicare. The Health Insurance Marketplaces were created as part of the ACA; however, they should not affect people with Medicare. If you have Medicare, you should not sign up for health insurance in the Marketplace. If you have questions about your Medicare benefits, contact 800-MEDICARE or go online and visit www.medicare.gov.
I recently received a yellow notice in the mail from the Centers for Medicare & Medicaid Services, saying that I will automatically get Extra Help. What does this mean?
Throughout the year, the Centers for Medicare & Medicaid Services (CMS) sends yellow notices to people who get their Medicare benefits through Original Medicare, the traditional Medicare program administered directly through the federal government, and have Medicaid, the health insurance program that serves people with limited finances. Essentially, this yellow notice tells you that you will automatically get Extra Help, because you have both Original Medicare and Medicaid.
Extra Help is the federal assistance program that helps people with Medicare pay for their prescription drug costs. If you have received this yellow notice in the mail, you should not have to apply for Extra Help. Again, you should get Extra Help automatically. However, in order to have Extra Help, you also need to have a Medicare Part D plan, also known as a Medicare prescription drug plan. As such, this yellow notice should also tell you that you will automatically be enrolled into a Medicare Part D plan if you do not actively choose and sign up for a Part D plan on your own. While the notice lists the name of the Part D plan you will be enrolled in if no changes are made, the notice should also list other Part D plans that you can sign up for.
If you would like to choose and sign up for a different Part D plan, you should contact 800-MEDICARE to do so. You can also contact your local State Health Insurance Assistance Program (SHIP) for further assistance on choosing a Part D plan that best suits your individual needs.
Marci’s Medicare Answers is a service of the Medicare Rights Center (www.medicarerights.org), the nation’s largest independent source of information and assistance for people with Medicare. To subscribe to “Dear Marci,” MRC’s free educational e-newsletter, click here.
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