I recently wrote about how federal health care reforms will affect young people, but this week I looked into how it will impact people at the other end of the spectrum: senior citizens.
If you think your health insurance benefits are difficult to understand, just wait until you’re over 65. It turns out that Medicare is pretty complicated, and I now have newfound respect for my grandparents for wading through all of the coverage options and paperwork.
One of the big pitfalls for people on Medicare is the dreaded “doughnut hole," and I don’t mean Munchkins. In Medicare-speak, the definition of “doughnut hole” is more like “Now I have to fork over up to $3,600 if I want to get my medication.”
You see, under Medicare, prescription drugs aren’t automatically covered. Seniors can purchase drug plans that help them pay for their prescriptions, and about 25 million seniors do so. But in many plans, the coverage maxes out around $2,800, at which point enrollees are on the hook for the entire cost of their medications. Once they have spent $3,600, so-called catastrophic coverage kicks in (which covers 95 percent of costs).
In other words, the initial Medicare coverage is the first side of that cake doughnut with rainbow sprinkles, and when that runs out, you're in the empty hole. Rack up $3,600 in medicine costs, and you're back on the other side of the coverage pastry.
Medical experts fear that when seniors hit the hole, they'll skip doses of their medications or stop filling their prescriptions because of the cost. In 2007, 20 percent of seniors with a chronic illness changed their medication habits when they reached the doughnut hole, reports the Kaiser Family Foundation.
But an estimated 4 million seniors will get a break in 2010. Under the Affordable Care Act, seniors who reach the doughnut hole will receive a $250 tax-free rebate (PDF). According to Bundle data, seniors spend an average of $164 a month on health care, so that one-time check will only cover about a month and a half of spending. But still, it’s something.
Starting next year, the doughnut hole is going to be phased out. By 2020, it will be gone entirely, and the only doughnut holes to reckon with will be the sweet kind.
Do you have prescription drug coverage? If not, how do you manage the costs?
Kate Tormey is a Chicago-based writer focusing on health care policy and wellness.
If you think your health insurance benefits are difficult to understand, just wait until you’re over 65. It turns out that Medicare is pretty complicated, and I now have newfound respect for my grandparents for wading through all of the coverage options and paperwork.
One of the big pitfalls for people on Medicare is the dreaded “doughnut hole," and I don’t mean Munchkins. In Medicare-speak, the definition of “doughnut hole” is more like “Now I have to fork over up to $3,600 if I want to get my medication.”
You see, under Medicare, prescription drugs aren’t automatically covered. Seniors can purchase drug plans that help them pay for their prescriptions, and about 25 million seniors do so. But in many plans, the coverage maxes out around $2,800, at which point enrollees are on the hook for the entire cost of their medications. Once they have spent $3,600, so-called catastrophic coverage kicks in (which covers 95 percent of costs).
In other words, the initial Medicare coverage is the first side of that cake doughnut with rainbow sprinkles, and when that runs out, you're in the empty hole. Rack up $3,600 in medicine costs, and you're back on the other side of the coverage pastry.
Medical experts fear that when seniors hit the hole, they'll skip doses of their medications or stop filling their prescriptions because of the cost. In 2007, 20 percent of seniors with a chronic illness changed their medication habits when they reached the doughnut hole, reports the Kaiser Family Foundation.
But an estimated 4 million seniors will get a break in 2010. Under the Affordable Care Act, seniors who reach the doughnut hole will receive a $250 tax-free rebate (PDF). According to Bundle data, seniors spend an average of $164 a month on health care, so that one-time check will only cover about a month and a half of spending. But still, it’s something.
Starting next year, the doughnut hole is going to be phased out. By 2020, it will be gone entirely, and the only doughnut holes to reckon with will be the sweet kind.
Do you have prescription drug coverage? If not, how do you manage the costs?
Kate Tormey is a Chicago-based writer focusing on health care policy and wellness.
