The Medicare prescription drug "donut hole" – the difference between what a beneficiary has to pay for after reaching the initial coverage limit and the amount the government pays for "catastrophic" drug coverage – is quickly closing.
Thanks to reforms under the Affordable Care Act, seniors who were covered under Medicare Part D paid less for prescription drugs in 2014 than they did last year, and the premiums for prescription drug coverage were also less expensive than they were in 2013. Since health care reform was enacted in 2010, the U.S. Department of Health and Human Services reports Medicare recipients have saved more than $11.5 billion in prescription drug costs alone, an average of more than $1,400 per person.
The Medicare prescription drug "donut hole" – the difference between what a beneficiary has to pay for after reaching the initial coverage limit and the amount the government pays for "catastrophic" drug coverage – is quickly closing.
Thanks to reforms under the Affordable Care Act, seniors who were covered under Medicare Part D paid less for prescription drugs in 2014 than they did last year, and the premiums for prescription drug coverage were also less expensive than they were in 2013. Since health care reform was enacted in 2010, the U.S. Department of Health and Human Services reports Medicare recipients have saved more than $11.5 billion in prescription drug costs alone, an average of more than $1,400 per person.
[Read: How Medicare Beneficiaries Can Save Money on Prescription Drugs.]
The average Medicare Part D monthly premium remained steady at about $31, and the deductible fell to $310 in 2014, down from $328 last year. The initial drug coverage threshold limit for 2014 was set at $2,850, down $120 from 2013. Seniors who fell in the "donut hole" got a bit of a lifeline, as catastrophic drug coverage for 2014 began at $4,550, down from $4,750 in 2013.
But until 2020, when Medicare Part D gets rid of the $1,400 drug payment restrictions, beneficiaries should continue to mind the gap.
Government officials, private insurers and Medicare experts say that means seniors should review their coverage during the Oct. 15 to Dec. 7 Medicare open enrollment period – looking for any changes in their current policies and checking whether another available plan might better suit their pharmaceutical needs. Despite improvements in drug coverage and lower overall expenses, Part D enrollees should still take steps to make their drugs even cheaper, and keep more money in their pockets.
"The drugs won't be free, but they'll easily be less expensive" than before health care reform, says Juliette Cubanski, assistant director for the Program on Medicare Policy with the nonprofit Kaiser Family Foundation. "That additional financial assistance has been very valuable for people."
Last year, then-Health and Human Services Secretary Kathleen Sebilius declared that reforms to Medicare Part D coverage, mandated by the Affordable Care Act, saved those over age 65 roughly $7 billion since 2010, the year the phased-in changes began. She credited the law, popularly known as Obamacare, with creation of a "competitive and transparent" marketplace that's driven costs down for the government as well as for consumers 65 and older.
"Medicare is much stronger as a result of the health care law," she said in an announcement last year.
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