|  | Healthcare Industry | Health Insurance

The Medicare D Gap Explained

Medicare is a public health insurance program to help senior citizens pay their health costs. Medicare has four parts: A, B, C and D. Part A is free, and its coverage relates to hospital fees. Parts B and C cover treatment and doctor fees. Part D, also called "prescription drug coverage," helps seniors to pay for prescribed medications.

  1. Part D Identification

    • Enrollment in Part D is voluntary. To receive its benefits, you must pay a monthly premium for the plan you choose. With Medicare Part D, you can buy the name-brand prescription drugs you need in any pharmacy of your choice. The range of the coverage (which medicines it covers and how much) depends upon the plan you choose and the premiums you pay. Higher premiums relate to more complete coverage.

    Coverage

    • You can choose different plans under the benefits of Medicare Part D as long as you find them on the Medicare website. All prescription plans have a common characteristic: a $4,550 gap. As of 2010, if you have Medicare Part D, you can purchase the medicine you need until you reach $2,830 in total drug expenses in a year. Once you reach this amount, your Part D coverage stops and you pay for any additional drugs you need with your own money. Once your own expenses reach $4,550, Medicare Part D starts again, helping you to pay for the costs of new prescription drugs that would exceed this amount.

    Disadvantages

    • The Medicare Part D gap, known as the "Donut Hole," brings up a great problem for most senior citizens who have opted to pay for Part D coverage. They spend a monthly amount of money, expecting it to lower the costs of medicine, but once they reach this gap, the program leaves them on their own. Second, one of the main reasons for having Medicare is the fact that most seniors do not have enough income to pay for all the medicine they need. If they reach the gap, many seniors will not have the resources to continue paying for medicine.

    Considerations

    • One of the features of the new U.S. healthcare system is it helps to fill the Medicare Part D gap. As of 2010, if you had Part D and were in the gap, the government gave a one-time tax-free rebate of $250 to help with prescription costs. As of 2011, the government gives a 50 percent discount on all the covered brand-name prescription drugs you need.

Health Insurance - Related Articles