The $4350 Medicare Donut Hole

The term Medicare Donut Hole (or Doughnut Hole) refers to the gap in prescription drug coverage between the Medicare initial coverage limit ($2700.00 for calendar year 2009) and the catastrophic coverage threshold ($4350.00). The term catastrophic coverage threshold is the most misunderstood and hard to understand term you might ever encounter. Most people believe that Medicare will cover their drug purchases once they hit $4350. This is far from the truth. Medicare catastrophic coverage actually kicks in after you, the taxpayer, pays out of pocket $4350. This means catastrophic coverage beings at $6,153.75. The key words here are: threshold and coverage.

You can go to Dunkin Donuts and get a delicious donut hole for about 25 cents.
If you eat the Medicare donut hole it is going to cost you $4350.

In this article I am going to explain: the deductible, the initial coverage limit, the Medicare donut hole, the catastrophic coverage threshold, and what you can expect to pay for prescription drugs in 2009 if you are on Medicare.

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The initial phase of Medicare coverage includes the first $2700 of drugs consumed in a calendar year. When you are within the initial coverage limit you pay for the first $295 of drugs you consume--the deductible. Then, you pay 25 percent of the next $2405.00 ($2700 less the $295 deductible) of prescription drug purchased.

Here is the math and what you will pay:

the $295.00 deductible

$601.25 (25 percent of $2405)

Total out of pocket expense $896.25

Keep in mind when calculating the $2700 initial coverage phase cost your deductible and co-pay are included in the amounts. So in the initial phase you can expect to pay $896.25 and Medicare covers the additional $1803.75.

If the total dollar amount of drugs you consume is less than $2700 then your cost is capped at $896.25 (it can be less, this is the max for this phase). This calculation assumes the drugs you are taking are covered by Medicare. There are certain drugs that are not covered.

Once you exceed the initial coverage limit you enter the so-called Medicare donut hole. This means you pay 100 percent of the cost of prescription drugs purchased and Medicare pays $0 (zero). This phase of coverage should be called the empty hole. Why? Well if you look at a donut and take a good hard look at the area called the hole you will notice there is nothing there. In the case of Medicare, once you enter this phase you are on your own and you pay 100 percent of the costs. You can go to Dunkin Donuts and buy donut holes they are very tasty. You can also buy supplemental prescription drug coverage to help reduce the cost of the Medicare donut hole-- not so tasty.

Here is the math if you max out the donut hole coverage and before you get catastrophic “threshold” coverage. You pay:

• $295 (the Medicare Deductible)
  


• $601.25 (your share of the initial coverage)
  


• 100 percent of the next $3,453.75 ($6,153.75 minus the $2700 initial coverage phase) or $4350.
  

Catastrophic coverage as you can see begins at $6,153.75 and after you spend out of pocket--$4350. I hope this clears up the difference between catastrophic coverage threshold and catastrophic prescription drug coverage. There is good news once you exceed the Medicare catastrophic coverage threshold you will pay five percent co-pays on all drugs purchased. Of course, you will pay less if you don't have to pay for an entire donut hole at your local pharmacy.

My mother, Dorothy, is 92 years old and suffers from Alzheimer's disease, high blood pressure, hypothyroidism and high cholesterol. She takes two drugs that by themselves send her into the donut hole--Obama Laying the Groundwork for U.S. Health Reform. I wrote previously about how Medicare pays full retail for the drugs it purchases on behalf of Medicare recipients. In other words, they pay the same as an individual would pay if they walked in the door of a pharmacy and purchased the drugs for themselves. Make sense to you? Oh, and by the way, Medicare is the largest purchaser of those two drugs in the world. I guess all the politicians in Washington felt that the transfer of our tax dollars to drug companies at 100 percent retail price was a good thing. Or maybe they benefited by doing so. I'll let you decide.

I hope President-elect Barack Obama and Tom Daschle will address this issue. If they want to put money in the pockets of consumers this would be a good way to do it. I feel certain many of those in the donut hole would put this money to work in the economy immediately. At least, they might be able to afford a donut.

If you are over 65 and on Medicare you could also consider joining a Medicare HMO. My mother is a member of Humana Gold Plus and she does pay less during the initial phase. However, unless you are well below the recognized poverty level or live in a state that helps at a low threshold of income you will find it difficult to escape the donut hole.

I intend to write more about this soon.

If you would like to get your voice heard on health reform go to Change.gov. You can enter your ideas into a simple form and submit it. If you have extra energy you might email your congressperson or United State's Senator and ask them to explain why Medicare pays full retail for prescription drugs. I am sure we would all like to hear the answers.

Seniors Still Mystified By Medicare’s Drug ‘Doughnut Hole’
Posted By Victoria E. Knight

Almost two-thirds of enrollees in Medicare Part D don’t fully understand the concept. More alarmingly, more than one-in-four either don’t know what the coverage gap is or how it works, according to a national survey of 1,000 Medicare Part D participants done for Medco Health Solutions, the big manager of pharmacy benefits.

In case you were wondering about the dimensions of the doughnut hole these days. The coverage gap will open up after beneficiaries and their drug plans have spent a total of $2,700 on medications in 2009. Seniors are then on the hook for the next $4,350. After that, the drug plans picks up most of the tab.

Unfortunately, three-quarters of enrollees mistakenly believe that only their out-of-pocket costs count towards the first $2,700, when in fact they need to factor in the health plan’s contributions as well, according to the Medco study.

“This misunderstanding gives many seniors a false sense of security that the coverage gaps is months away, when it reality, it could hit them with their next refill,” Richard Dupee, president of the Massachusetts Geriatric Society and chief of geriatrics at Tufts Medical Center, told the Health Blog. “Without knowing how the coverage gap works, it’s simply impossible to takes steps to push off or prevent it.”

The WSJ has tips on how to become a doughnut-hole dodger as well as advice on what to look for in coverage this open enrollment season (you have until Dec. 31 to decide). Perhaps unsurprisingly given the study’s findings, Medco, which offers Medicare Part D plans, has just launched a new web site “What’s Your Gap?” with its suggestions on how seniors can save.

Almost three years since the addition of drug coverage to Medicare, seniors remain confused about the infamous coverage gap known as the “doughnut hole.”

Read More About Alzheimer's

Ten Million Baby Boomers likely to suffer from Alzheimer’s during their lifetime

Five Ways to Keep Alzheimer's Away

High cholesterol levels in your 40s raises Alzheimer's risk

Alzheimer's and the Thyroid

Alzheimer's Disease Facts and Figures 2008

The Alzheimer's Action Plan: The Experts' Guide to the Best Diagnosis and Treatment for Memory Problems

LY450139, A Phase III Clincal Trial on the Progression of Alzheimer's Disease

Alzheimer's Reading Room: LY450139, A Phase III Clincal Trial on the Progression of Alzheimer's Disease: "LY450139 is being tested to see if it can slow the progression associated with Alzheimer's disease by inhibiting gamma-secretase, an enzyme that can create a sticky protein called amyloid beta. Slowing the rate of disease progression could preserve independent functioning and quality of life for Alzheimer's patients in the milder stages of the disease, potentially delaying the onset of the severe stages of the disease."

Combining Alzheimer's drugs helps slow rate of decline in Alzheimer's Patients

These findings should bring hope to those suffering from Alzheimer's and dementia. Baby boomers should take note.

clipped from alzheimersreadingroom.blogspot.com My mother is currently moving into the medium stage of Alzheimer's so for us this is exciting news. I intend to send this information to our personal care physician and discuss it with him immediately. "Finding something that could actually modify the course of the disease is the Holy Grail of Alzheimer's treatment, but we really don't know if that is happening or what the mechanism behind these effects might be," Alireza Atri explains. "What we can say now is that providers should help patients understand that the benefits of these drugs are long term and may not be apparent in the first months of treatment. Even if a patient's symptoms get worse, that doesn't mean the drug isn't working, since the decline probably would have been much greater without therapy." The results raise the intriguing possibility that the drugs may be protecting the patients' brains from further deterioration, the authors said.

Alzheimer's and the Thyroid

I wish I could shout this from the mountain top: "when Alzheimer's or dementia present themselves get the thyroid checked".

About a year ago, I read an article on hypothyroidism and posted it to this blog. The article described the symptoms of hypothyroidism and how it is associated with an increased risk of Alzheimer's disease in women only. The symptoms of hypothyroidism include: forgetfulness, weight gain, depression, dry skin, and fatigue. All of these were present in my mother. As a result, I asked our personal physician to check my mother's thyroid. Sure enough she was suffering from a sluggish thyroid. He prescribed levothyroxine.

The results of the medication for us were remarkable. Within a couple of months my mother started to smile more often. Next thing I knew, my mother started to experience an occasional hearty laugh. Something she had not done in years. If you are a caregiver, like me, you will understand how frustrating it can be when your loved one stops laughing and smiling. I believe you will understand how wonderful I felt when I heard my mother laugh for the first time in years. My mother continues to smile with greater frequency and I can tell you she went for years without a smile before the introduction of the drug. An additional benefit included a slow but gradual loss of weight(about 8 pounds so far). We were fortunate that we read the article on hypothyroidism. If you, a friend, or a loved one is suffering from dementia or Alzheimer's please get the thyroid checked closely.

In the book The Alzheimer's Action Plan: The Experts' Guide to the Best Diagnosis and Treatment for Memory Problems the authors discuss in detail physical problems that can and do effect memory. The book is worth obtaining. It is full of beneficial information and resources.

I am not trying to mislead you here. The prescribed drug did not cure my mother's Alzheimer's. But, there is quite a bit of research which indicates that hypothyroidism can present as Alzheimer's or dementia.

Previously on the Alzheimer's Reading Room.

Abnormal Thyroid Levels Can Increase Risk For Alzheimer’s Disease in Women

Overuse Of Antipsychotics Among Nursing Home Residents With Dementia

Is it Alzheimer's or something else?

Alzheimer's Question, Where can I get the best medical evaluation for my wife?

hypothyroidism

Ten Million Baby Boomers likely to suffer from Alzheimer’s during their lifetime

I am a baby boomer. My mother suffers from Alzheimer’s disease. Five years ago, I left my job as the CEO of a small software company to take care of my mother. I am living the devastating effects of Alzheimer’s from the front row.

It is rare to meet baby boomers that are concerned about their own uncertain fate when it comes to Alzheimer's disease. This includes most of my close friends. Fifteen thousand baby boomers are turning 60 each day.

• Every 71 seconds someone develops Alzheimer’s disease.

• Alzheimer’s disease is now the sixth leading cause of death (recently surpassing diabetes).

• One in every eight adults over the age of 65 suffers from Alzheimer’s disease.

• One out of every two adults over the age of 85 suffers from Alzheimer’s disease.

• Ten million baby boomers will develop Alzheimer’s disease in their lifetime.

Alzheimer’s disease is certain brain death. Imagine living in a world where you can recount experiences from 1936, but can’t remember your birthday party five minutes after it ended. Meet my mother. My mother never suffered a major illness. She never had an operation. Five years after her diagnosis she is in very good health. But, her brain is dying. She doesn’t know it.

I started the Alzheimer’s Reading Room to keep track of the thousands of articles and many books I was reading. I soon realized I could help the ten million Alzheimer’s Caregivers worldwide by personalizing this information on my blog. Later on, I decided to start writing about our successes in fighting the disease, our decisions on treatments, our new life style, where to look for help, and news about the search for a cure. I stick to information I believe is useful and helpful. There is an enormous amount of new information each day; it’s difficult to identify the best and most useful information. This is my job.

I now know there are many things baby boomers can do to lower the odds of contracting Alzheimer’s disease. I do all of these things for myself each day. There are things you can do to stave off the disease. You need to start doing them now. You cannot wait. With this in mind, I am broadening my mission on the blog to include information to help baby boomers understand and take action against Alzheimer’s

Here are few things baby boomers should be doing right now:

• High blood pressure (hypertension) is a cause of cognitive decline. Hypertension causes build-up of beta-amyloid in the brain. This is a complication frequently associated with Alzheimer’s disease. Take action to get your blood pressure down now.

• High cholesterol levels in your 40s may raise the chance of developing Alzheimer's disease decades later. Failure to deal with this condition effectively could raise the odds of contracting Alzheimer’s disease by fifty percent. Get your cholesterol checked often and get it down.

• B12. A recent study found that people with higher levels of vitamin B12 were six times less likely to experience brain volume loss. A simple blood test is all that is needed to check the level of B12 in your system. You should start eating foods rich in B12 and consider getting B12 shots to raise the amount of B12 in your system.

• Big Belly. Having a large belly in middle age nearly triples the risk of developing dementia.

• Cocoa flavanols. A recent study at Harvard found that those who regularly drank a cocoa flavanol-rich beverage had an eight percent increase in brain blood flow after one week, and 10 percent increase after two weeks. I highly recommend incorporating this into your diet.

• Exercise. A new study just released shows that regular exercise is one of the best ways to reduce your risk of dementia and can help slow progression of Alzheimer's disease.

In the days ahead, I will be writing more about ways to combat Alzheimer’s disease. If you know someone currently caring for a loved one with Alzheimer’s disease please tell them about the blog. You can subscribe to the blog via email or reader by taking the appropriate action on the blog.

They are predicting that ten million baby boomers will suffer from Alzheimer’s disease. By spreading the word and taking action we can lower the number. Let’s get together on this.

Original content the Alzheimer's Reading Room

The Alzheimer's Action Plan: The Experts' Guide to the Best Diagnosis and Treatment for Memory Problems