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How to Avoid the Medicare Part D Donut Hole

Medicare is the government’s program for eligible retirees aged 65 and over, those suffering end-stage renal disease and those under 65 with some disabilities. One part of the Medicare Program is Part D, which provides prescription drug coverage. As it is now set up, once you have exhausted a predetermined annual amount, you pay the full cost of your medications. This is the dreaded donut hole. You have options available to you that can help you avoid this situation.

  1. Medicare Part D

    • The Medicare Part D program is a voluntary program. You are not required to participate in Part D, but if you choose to do so, you pay an out-of-pocket premium every month. Depending on the annual deductible limits, you pay for 100 percent of your medication costs until you reach that deductible limit. Once you have reached your deductible limit, you pay 25 percent of the cost of your medications. This limit changes annually; once you reach it, you are responsible for paying the full cost of your medications — the donut hole.

    Private Enhanced Part D Programs

    • You have the option of applying for private enhanced Part D programs, but these require additional co-payments, not the 25 percent cost you pay under the government program. The plans may also require a higher monthly premium.

    Low-Income Subsidy

    • Depending on your income and documented resource limits, you may qualify for a low-income subsidy program called Extra Help. As of the time of publication, your annual income must be no higher than $16,245 for a single person or $21,844 for a couple; as a single person, you may have up to $12,510 in resources. Married couples who qualify may have up to $25,010 in resources, according to the Medicare website.

    Pharmaceutical Assistance Program

    • Several pharmaceutical companies have developed prescription/pharmaceutical assistance programs, or PAPs, intended to help eligible applicants pay for the medications that they need. Companies make paper applications available at doctors' offices and pharmacies. In addition, if you have Internet access, you can download an application from some companies' websites. Fill out either application and ask your doctor to fill in the information that documents your need for the medication. Once you have sent the application, the pharmaceutical company decides on your eligibility and, if you qualify, sends a card that allows you to receive your medications at a reduced cost or for free.

    State Pharmaceutical Assistance Program

    • Your state may have a state pharmaceutical assistance program, or SPAP, that helps you to pay for your medications. To qualify, you must meet certain guidelines that pertain to age, financial need and/or medical conditions. Rules vary from state to state. Ask your doctor for contact information for the SPAP in your state or, if you have Internet access, visit the state pharmaceutical assistance program's website.

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