One of the main services ComPro (comproins.com) offers their clients is to help them navigate the path to starting Medicare as well as keeping their Medicare choices current. This includes doing annual reviews of their clients’ Prescription Drug Plans (PDPs) during the Annual Enrollment Period (October 15-December 7). During these PDP reviews, one of the most commonly asked questions their agents are asked is, “What is the Donut Hole?”
Is the “Donut Hole”…
a. A way to confuse Medicare beneficiaries about their prescription costs.
b. The time of year when Tier 3, 4, or 5 prescriptions are really expensive.
c. A weekly treat at Krispy Kreme.
d. When Medicare beneficiaries are responsible for paying 25% of their prescription drug costs.
The correct answer is “d”. Applying this to a specific prescription is the best way to illustrate how the Donut Hole works. In this case, Xarelto. This is a commonly prescribed blood thinner that is designed to prevent blood clots or to help patients with heart arrhythmia reduce the risk of stroke. It has a retail cost of $560. Xarelto’s high cost makes it a good choice for this illustration because it most certainly will take a beneficiary into the Donut Hole.
Here are the four phases of covering the cost of Xarelto:
Phase I, Deductible: When first filling the Xarelto prescription in January, the plan’s deductible of $0-$505 will be met.
Phase 2, Initial Coverage: The Medicare beneficiary will pay a set copay amount ($40-$45/refill) until the combined total of what the individual AND the plan have paid totals $4,660 (this includes all prescription costs).
Phase III, the Donut Hole: At this point, the Medicare beneficiary will “hit the donut hole”. This means they will begin paying 25% of the retail cost for Xarelto (and other Tier 3, 4, or 5 prescriptions). During this phase, the cost to fill Xarelto prescription may be as high as $140. This continues until the beneficiary and their plan spend $7,400 on ALL prescriptions.
Phase IV, Catastrophic Coverage: The Medicare beneficiary will pay 5% of the retail cost, or about $28 per refill.
For Medicare beneficiaries with multiple Tier 3, 4 or 5 prescriptions, filling their prescriptions can be very expensive and almost always a source of confusion. For this reason, it’s important that Medicare beneficiaries take time to review their PDP annually with a licensed health insurance agent during the Annual Enrollment Period. Why? Even though the “Donut Hole” in many cases cannot be avoided, beneficiaries can rest assured that they have made the best decision possible. The idea of “hitting the donut hole” can remain a treat and not a tragedy.
ComPro offers health insurance plans for Employee Benefits, Individual & Family and Medicare. They are your trusted and local resource for health insurance! To make an appointment with one of their licensed insurance agents, call (402) 488-5100. For more info on ComPro, visit www.comproins.com.