Social Security Disability, Medicare Part D Prescription Plans and the Dreaded Doughnut Hole

Date: October 10, 2011
Posted In: DLP Law

          For Social Security Disability recipients, the “doughnut hole”, or Medicare Part D Coverage gap,  is the point in Medicare Part D drug prescription plans where you have to start paying more for your medications. It reflects the gap from the initial coverage limit and the catastrophic coverage threshold. While on Social Security Disability, after a Medicare beneficiary surpasses the prescription drug coverage limit, the Medicare beneficiary is financially responsible for the entire cost of prescription drugs until the expense reaches the catastrophic coverage threshold. While all prescription drug plans must explain the coverage gap in their literature and advertising, the doughnut hole comes as a shock to many enrollees once the beneficiary reaches the initial coverage limit as most beneficiaries abruptly go from making co-payments to paying 100% of the prescriptions costs until they reach the catatrophic coverage threshold.

          For those on Social Security in 2012, the initial coverage limit has been set at $2,930.00. Once the the beneficiary and the Part D drug plan together have paid $2,930.00 in drug costs (not counting Part D premiums), the Social Security beneficiary will enter the dreaded doughnut hole and will remain in that status until they have spent $3,728.00 (or $6,658.00 total costs). That’s the bad news. The good news is that while in the doughnut hole, you’ll receive an automatic 50% discount on brand name drugs and a 14% discount on generic drugs. The 50% brand-name discount is counted as though you had spent the money out-of-pocket. After you have spent $3,728.00 while in the doughnut hole, the coverage gap ends and you meet the catastrophic threshold. At that point, your coverage plan will pay most of your prescription costs for the remainder of that year and you will be responsible for the payment of a small deuctible (about 5%).  

Thomas P. Cummings, Esq.

Tom Cummings
Thomas P. Cummings has been a Partner with Dougherty Leventhal & Price, LLP since 1996 and has been with the firm since 1991. He focuses his practice on workers’ compensation, Social Security Disability and personal injury cases.