New reforms will close the coverage gap or “donut hole” in Medicare prescription drug coverage.

Medicare Part D pays what it terms “initial benefits” to a certain limit each year and then it stops paying benefits until the member’s expense meet another threshold.  The gap in coverage where Medicare does not pay has been known as the “donut hole.”

PPACA provisions help Medicare beneficiaries by giving relief during the coverage gap:

• In 2010, if you have expenses that fall in the coverage gap, you will receive a $250 rebate from Medicare.
• Beginning in 2011, if you reach the donut hole, you will receive a 50 percent discount on the total cost of brand-name drugs while in the gap.
• Medicare will phase in additional discounts on the cost of both brand-name and generic drugs.

Interested in purchasing Medicare Part D?  You may do so:

• During the three months prior to the month in which you turn 65;
• During the month in which you turn 65;
• During the three months after the month in which you turn 65; or
• During open enrollment periods, which occur between November 15 and December 31 of each year

Please note that the earlier you sign up, the less it will likely cost you.  Costs increase with every year you choose not to enroll.

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