2011 Brings Significant Savings on Part D Drug Costs

While prescription drugs are expensive, this year Medicare beneficiaries will receive more help with their prescription drug costs, thanks to health care reform. Starting now in 2011, once a beneficiary and his/her drug plan have spent a combined $2,840 on covered drugs, s/he will reach a coverage gap also known as the “donut hole.” At that point, the beneficiary pays only 50% out-of-pocket on covered brand-name drugs and 93% on covered generics until their out-of-pocket costs reach $4,550 for the year. (Note that the entire cost of the drug is counted towards this $4,550 threshold, not just the 50% the beneficiary pays). This is different than previous years where beneficiaries paid 100% of their drug costs during the donut hole.

After reaching the out-of-pocket maximum of $4,550, a beneficiary pays 5% or a small copayment for covered drugs, whichever is greater.

The donut hole will gradually decrease over the next 10 years until it is completely eliminated in 2020 and beneficiaries pay just 25% of their drug costs.

See our recent newsletter article and our Prescription Drugs section for more information on the the Part D and 50% discount on brand name drugs while in the donut hole.

Karen Joy Fletcher

Our blogger Karen Joy Fletcher is CHA’s Communications Director. With a Masters in Public Health from UC Berkeley, she is the online “public face” of the organization, provides technical expertise, writing and research on Medicare and other health care issues. She is responsible for digital content creation, management of CHA’s editorial calendar, and managing all aspects of CHA’s social media presence. She loves being a “communicator” and enjoys networking and collaborating with the passionate people and agencies in the health advocacy field. See her current articles.