Phases of Medicare Part D: The Coverage Gap

There are different phases to Medicare Part D prescription drug plans. With so many different parts to these plans, it sometimes leaves people at a loss and unable to understand the benefits these prescription drug plans allow them. As people get further into their prescription drug plans without explanations, they become more upset than necessary. One of the biggest surprises for those that don't understand their prescription drug plans is the coverage gap.

As people have gone through their deductible phase and into their initial coverage period, they don't always expect things to change. There are some members of prescription drug plans that rarely see things change in their prescription drug plans and others that are exposed to constant changes. There are some people that go to the pharmacy and discover they are no longer required to pay their copays for their medications. Instead they are asked to pay for a larger percentage of the medications they have requested to be filled. This is the coverage gap.

The coverage gap is something that happens to people when they have prescription drug insurance and the total cumulative cost of their medications have gone over $2930. Many people don't understand how this happens when they have only been paying copayments for their medications for several months.

As people go to the pharmacy during their initial coverage period, they are only asked to pay for a small copayment to get their medications. This is not the total cost of the medication. When medications are filled, there is a negotiated price that the insurance company has agreed upon with the pharmacies and their members agreed to those prices when they accepted the insurance plan. When a member goes to the pharmacy to have their medications filled, they are only asked to pay a specific copayment because that is what is in their benefits. The remaining portion of that payment is paid to the pharmacy by the insurance provider.

What many people don't realize is that the total negotiated prices of those medications are tracked and listed for each insurance member. When the total cost of the medications they have filled goes over the benchmark of $2930, they are no longer in their initial coverage period. They are then placed into what is called the coverage gap/donut hole.

During the coverage gap, instead of insurance members being asked to pay a small copayment for their medications, they are asked to pay a certain percentage for their medications, often resulting in a higher out of pocket expense for millions of people.

Those that go into the coverage gap in 2012 are expected to pay at least 50% of the negotiated price of their brand name medications. There are some drug manufacturers that have agreed to give their patients a 50% discount. This means that instead of being responsible for the entire negotiated price of their brand named medications, they will only pay approximately 50% of the cost. For the members that have fairly new brand named medications, the cost of their prescriptions during this time can be overwhelming.

In some cases there are patients that don't have brand named medications and still go into the coverage gap. For those that do go into the coverage gap and have to pay for their generic medications, they are expected to pay at least 86% of the negotiated price for those generic medications. This is something that has been mandated by the Centers for Medicare and Medicaid Services.

As people go into the coverage gap, they are often devastated by the higher out of pocket expenses they have to pay. Many of these people are anxious to get out of the coverage gap because they can't afford the higher expenses. Many of these members don't realize there are 2 ways out of the coverage gap. They can either pay their way out of the coverage gap or the plan year comes to an end.

When people enroll into a Medicare Part D prescription drug plan, they enroll for one calendar year at a time. The year begins on Jan. 1 of that year and ends on Dec. 31. On Jan. 1, the plan starts over with no regards to what has transpired just the day before. The plan is "new" and the cumulative totals start over. No matter what phase these members are in on Dec. 31, Jan. 1 starts it all over. If a member is in the coverage gap on Dec. 31, that is the last day they will be in the gap for that year because all the benefits start over on Jan. 1.

In order for a member to pay out of the coverage gap, they will have to continue using their prescription drug plans until their total medication costs equals $4700. When most people see or hear this explanation, they often wonder how they will be able to pay an additional $4700 for their medications and be able to live. There is a little more information that needs to be said about that figure.

In order to go into the coverage gap, there has already been a total cumulative expense of $2930 for medications. That $2930 is a part of the $4700 expense that has to be paid to get out of the coverage gap. Instead of having to pay an additional $4700, members will have to pay a total expense of $1770 during their coverage gap period in order to get out of it. The additional $1770 is satisfied by the money that members have paid at the pharmacy as well as any manufacturer discount that is given. With the costs of some medications, the additional $1770 can be quickly met.

The burden of paying more money out of pocket for necessary medications is not always an easy pill to swallow. There are some medications that can be as high as $250 after the manufacturer discount. Not everyone is able to pay those prices for a medication they need to live a productive life. When there are issues paying for a medication during the coverage gap, there are different things that can be done to find relief.

There are many manufactures that know their medications are expensive and they actually offer discount programs to those that have limited resources and incomes. Not only are there state resources available to help with the cost of medications during the gap, the Social Security Administration also has a Low Income Subsidy Program available to those that qualify. There are also different programs in each state that could offer relief in a very stressful and potentially unhealthy time for people. Instead of people being forced to go without their medications, there are programs that are available to help with those costs.

The coverage gap is a time that many people struggle to pay for their medications. This is especially true for those that have to take all brand name medications. When this happens, there are programs that can be explored to help pay for those medications. Members can also talk to their doctors to find a cheaper alternative for their medications. If members feel they are not getting a discount for their medications, they should call their prescription drug plan provider and discuss their options and if the discounts are being given. If they aren't and there is a dispute with the discount, members can always file an appeal with the company.

During the coverage gap, many people don't see the point of having a Medicare Prescription Drug plan. Although it is a huge burden for many to pay for their medications during the gap, it could be worse. Many people don't realize their out of pocket expenses could be much worse if they didn't have any insurance and were forced to pay the retail prices for those medications. When people are feeling the pinch at the register, they should reach out to their insurance provider to find resources as well as talk to their pharmacist for additional tips.

Jul. 16 12'
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Jul. 6 15'


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