Medicare beneficiaries have always worried about landing in the
"doughnut hole." Within this coverage gap, they have to pay the
full cost for their prescription drugs. In 2010, the Medicare Part
D doughnut hole starts after your prescription-drug expenses total
$2,830 for the year (including both your share and the insurer's
share of the costs). At that point, you generally have to pay for
all of your drugs until total costs for the year reach $6,440, when
catastrophic coverage kicks in.
The health-care-reform law made several changes to the doughnut
hole. Starting in 2011, drug companies will be required to provide
a 50% discount on brand-name drugs in the coverage gap. And the
doughnut hole will gradually shrink until Part D beneficiaries will
have to pay just 25% of drug costs in the coverage gap in 2020. See
What Health-Care Reform Means for Medicare Drug
for more details.
And this year, people who fall in the coverage gap will receive
a one-time $250 rebate check. The rebate is tax-free. The first
batch of checks was mailed June 10. Here's what you need to
Who qualifies for the $250 rebate check?
To qualify, you must have reached the Medicare Part D doughnut
What do I need to do to get the rebate? Do I need to fill out
You don't need to do anything. The government will automatically
send you a check when you reach the coverage gap.
Beware of anyone who offers to help you submit the paperwork.
Some crooks have been using the rebate as a ploy to gather your
personal information, Social Security number or bank account
information and steal your money or identity. If anyone asks you
for this information to help you get the rebate, report the
incident to Medicare (800-633-4227) and to your state attorney
How will I know when the real check arrives?
The envelope will have the U.S. Department of Health and Human
Services symbol and will say "Medicare Part D."
When will I get the check?
If you have already reached the doughnut hole, you should be
receiving your check soon. The first wave of rebate checks was
mailed on June 10. More checks will be mailed monthly throughout
the year -- you should expect to receive yours within 45 days of
falling into the gap. You won't get the check, however, if you're
receiving the low-income subsidy to help pay your Part D
How will I know if I'm close to reaching the doughnut
The Explanation of Benefits notice that your drug plan mails to
you each month when you fill a prescription alerts you when you've
entered the gap. Use our
Doughnut Hole Calculator
to help you predict when you'll reach the coverage gap.