Kansas & Missouri Estate Planning

Filling the Medicare Doughnut Hole

There is some good news for many Medicare recipients, present and future. According to new Medicare figures, the cost of falling into the “doughnut hole” is shrinking.

The so-called "doughnut hole," as many know all-too-well, is the treacherous territory you fall into when you have spent too much of your Medicare Part D benefits to continue receiving full benefits (but not so much of your own money to qualify for "catastrophic coverage").

It's an easy hole to fall into, especially if you have a special medication. With the new health law, however, pharmaceutical companies have begun offering a 50% discount on medications to beneficiaries in the gap, and that has meant a great deal of savings.

According to the figures, the average beneficiary who falls into the coverage gap already would have spent $1,504 this year on prescriptions. Yet, with the new law, that cost fell to $901, with each individual doing better or worse depending on which medicines they use.

I thought you could use a little cheery news today.

Reference: ABC News (November 27, 2011) "AP Newsbreak: Medicare’s Drug Coverage Gap Shrinks"

Medigap Policies Catch (Unfavorable) Attention of Congress

Are you (or a loved one) a Medicare beneficiary? If yes, then likely you already know that it doesn’t always cover all the costs in a time of crisis. That’s why there are Medigap policies.

Unfortunately, Medigap policies might just be the next thing to get the unwanted attention of Congress, according to a recent article in the Kaiser Health News.

A Medigap policy is actually a private, supplemental form of insurance to cover medical bills Medicare doesn't cover. Medigap is especially important in a crisis, since it can kick in for hospital visits that otherwise would go uncovered. Accordingly, this can prevent a financial crisis on top of a medical one.

If nothing else, a good Medigap policy offers a bit more peace of mind.

The problem some are citing against Medigap policies, from a budget perspective, is that they offer too much peace of mind and allow beneficiaries to seek medical care even when it's not absolutely necessary. As a result, this puts a strain on Medicare itself.

So, does this criticism of Medigap have any merit? It's hard to say, and it's certainly hard to quantify. In addition, it's difficult to make sense of the social safety net (Medicare) – or a private supplement to it (Medigap) – if it doesn't offer some peace of mind.

Regardless, if this Congressional "attention" touches you (or your loved ones), it's worth keeping tabs with any new developments. The original article offers the recent history of Medigap policies and the attitude of Congress regarding them.

Reference: The Kaiser Health News (November 21, 2011) "Officials Looking to Cut Federal Spending Eye Medigap Policies"