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Home > Newsroom > Health Care Reform Enhances Prescription Drug Coverage

Health Care Reform Enhances Prescription Drug Coverage

Shrinks "Donut Hole"

Detroit -- November 15, 2010 -- Good news for Medicare beneficiaries: the new federal health care reform law implements a 10-year plan to increase Medicare coverage in the Donut Hole. The new Health Alliance Plan (HAP) "Health Reform -- Improving Medicare Part D" booklet is a free, educational resource for anyone who is interested in learning more about the enhancements to Medicare Part D coverage.

"The Part D Coverage Gap, or the Donut Hole, is the portion of prescription coverage not covered by Medicare that generally affects people who use expensive drugs or a large volume of different drugs," said Karen Wintringham, HAP vice president, Medicare Programs.

"The good news is that as part of health care reform the Donut Hole will shrink in the coming years. From 2012 through 2020, the amount a beneficiary pays will continue to be reduced until the beneficiary will be paying just 25 percent of the costs."

"It's also important to note that in 2010, Medicare paid $250 to Medicare beneficiaries who reached the Donut Hole. Although this amount is modest, it is meant to help cover some of the costs," Wintringham said.

Also new in 2011, all plans with a Medicare Part D benefit will offer a minimum seven percent discount off the plan's negotiated prices on generic drugs and a 50 percent discount off the plan's negotiated prices on brand-name drugs (plus the applicable dispensing fee). Given the low cost of generic drugs, the seven percent generally results in a much lower price than the 50 percent discount on brand-name drugs. However, some drugs do not have a generic option, so 50 percent is a significant cost savings.

The educational "Health Reform -- Improving Medicare Part D" booklet contains general information about Medicare Part D, the Donut Hole and health care reform enhancements. The booklet also covers a special Medicare program for people with limited incomes.

For a free "Health Reform -- Improving Medicare Part D" booklet, call 800-971-7878.

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