Checks being sent to seniors in drug coverage gap

Thursday, June 10, 2010

Today Medicare will begin mailing $250 "donut hole" checks to tens of thousands of seniors. Not all Medicare beneficiaries will receive checks. Under the recently enacted health reform law, seniors who fall in the donut hole coverage gap in 2010 will receive this one-time, tax-free $250 rebate check. These checks will begin being mailed directly to seniors who enter the coverage gap over the next several months.

When Medicare recipients' prescription drug costs exceed $2,830, they enter the so-called donut hole, a gap in coverage under the prescription drug benefit during which the beneficiary pays 100 percent of the cost of drugs until he or she hits the catastrophic coverage threshold.

The checks are the first benefit from health reform for seniors in the Medicare Prescription Drug program. In January 2011, seniors in the donut hole will receive a 50% discount on brand name drugs. By 2020, the donut hole will be closed, meaning that there will be no gap in coverage.

The $250 checks are the first step in reducing seniors’ prescription drug costs under the health reform legislation passed earlier this year. Beginning next year, there will be a 50 percent discount on prescription drugs in the donut hole, and by 2020, the donut hole is completely closed.

Medicare recipients don’t have to do anything to get the $250 check. Once their drug costs for the year hit $2,830, the one-time check will be issued automatically. To avoid fraud or scams by con artists looking to profit on consumer confusion during this phase, seniors and their families should know that beneficiaries will not be contacted in advance and that the checks will be mailed directly to those who qualify. Beneficiaries will not have to do anything to receive the check.

Consumer Action warns seniors not to give out any personal information to strangers who either call or show up at their door step claiming to be Medicare representatives.

Medicare.gov is the official government site for Medicare beneficiaries. Click here to visit Medicare.gov.

To read a fact sheet from the White House on health reform changes to Medicare, click here.

To hear a recorded message from Medicare about the new benefits, click here.