The president will be using these to close your coverage gap.

1.)    The phrase “doughnut hole,” or “donut hole” if you prefer Dunkin Donuts to your average breakfast fare, refers to the coverage gap for seniors on Medicare prescription drug plans. After a prescription drug plan (PDP) pays a certain amount of cash for a beneficiary’s medication, the beneficiary is then responsible for paying out of pocket until they reach spending that requires catastrophic coverage, after which the plan will help cover prescriptions for the rest of the year.

2.)    AARP’s Doughnut Hole Calculator is a great tool that can help you avoid the doughnut hole. Type in the specifics about the drugs you need to generate a report for the year that will tell you if you are likely to hit the gap. If you are deemed likely to hit the gap, the calculator can show you alternatives that can reduce costs. It isn’t an instant cure-all, but knowing your needs can work wonders in closing your personal doughnut hole.

3.)    Some prescription drug plans cover generics within the gap, but often come with more expensive premiums. Remember, not all plans cover generics in the gap, so it’s crucial to understand what exactly your PDP or Medicare Advantage page covers.

4.)    In early June, the Department of Health and Human Sources sent out $250 doughnut hole rebates to seniors who fall into the coverage gap.  You’ll receive the checks automatically after you enter the doughnut hole, but keep record of prescription medication as backup just in case you don’t receive your rebate for some reason.

5.)    Scammers are preying beneficiaries who receive doughnut hole checks—which I like to think of as Munchkins. Remember, you don’t need to get your money through a third party, and you don’t have to tell anyone any personal information to receive a check. The Consumer Reports Money blog has a great overview of these scams. Help yourself or a loved one avoid fraud.

6.)    By 2020, the government hopes to close the doughnut hole completely. In 2011, the government will begin providing drug discounts to beneficiaries enrolled in Part D plans. Discounts will increase until 2020, when the doughnut hole will look more like a Boston cream doughnut than a regular ring doughnut.

While prescription drug plans can sometimes control costs, the wide expanse of the doughnut hole can really put a hurting on your wallet. Hopefully health care reforms will truly eliminate the coverage gap for seniors. Until then, the government will be taking baby steps to reduce drug costs for people with Medicare.

Medicare Part D Prescription Drug Coverage plan offers coverage for brand name and generic prescriptions drugs to anyone eligible for Medicare and is provided through private insurance plans. In order to be eligible for Medicare Part D, you must be entitled to Medicare benefits under Part A and/or enrolled in Part B. You must also be a resident in the prescription plan’s service area and not be enrolled in more than one Medicare Part D plan at a time. You usually pay a monthly premium and may pay a yearly deductible. Depending on the plan you select, you will also have co-pays or coinsurance for your prescriptions.

Since plans and premiums are changing, experts advise existing Medicare beneficiaries to review their current plans. Lists of covered drugs are changing and so are restrictions and costs so the plan you had for 2008 may not work for 2009. Also, new beneficiaries should look at a variety of plans to see what is best for them and their health needs. Make sure you talk to an expert and learn everything you need to know about the plan you have or are choosing because after Jan. 1, everyone is locked into their plan, with a few exceptions. The few exceptions include people who get low-income subsidies and people who have Medicare HMO or Medicare PPO private health plans.

The premiums of most plans are going up and prescription drugs that were covered last year may not be covered this upcoming year. The Centers for Medicare & Medicaid Services stated that initial deductibles for the standard benefit plan rose from $275 in 2008 to $295 in 2009. Also, beware of the donut hole. This term refers to a “coverage gap.” Within this gap, the beneficiary pays 100% of the cost of prescription drugs before catastrophic coverage kicks in. The initial coverage period covers up to $2,510 worth of prescription drugs. After the initial coverage period ends, the donut hole comes in. The donut hole lasts until you have spent $4,050 out of pocket on co-pays and drug costs. The catastrophic period is when the insurance company pays 95% of additional drug costs once you’re through the donut hole.

There are many people who can help seniors decide what to do when it comes to the Medicare part D Prescription Drug plan. For extra help and more information on Part D, you can visit the Medicare website (www.medicare.gov), call 1-800-MEDICARE, or call your local area agency. There is also a lot of information on the internet to help you in deciding on a plan.

If you need help deciding what plan is best to fit your needs, there are many resources at your disposal to help during the open-enrollment period. In order to make an informed decision, you must know the basics first.

Medicare Advantage Prescription Drug Plans include Medicare Part A (hospital), Medicare Part B (doctor’s office visits), and Part D (prescription drug coverage). Medicare Part D plans only include prescription drug coverage and are usually purchased by people who already have Original Medicare (Part A and B).

Since the lists of covered drugs are changing as well as restrictions and costs, Medicare beneficiaries are being advised to review their current plans to make sure it will still benefit them in 2009. Because the enrollment period will soon come to a close, beneficiaries should review their plan and then begin viewing other plans and pricing. You should consider costs, doctors/providers, and travel when choosing a plan. Costs, such as premium, copayments, coinsurance, and deductible expenses, are changing. You also need to make sure that you’re able to visit the providers you want on your current plan and check to see if there will be additional costs if the provider is out of network or referrals are needed. You may also be travelling in the near future. Are you drugs covered if you travel to another state? You should make sure that your plan provides coverage in other states.

According to the Centers for Medicare and Medicaid (CMS), average monthly premiums for standard Part D coverage will be $28 in 2009, as opposed to the $25 in 2008.

What do you need to do when considering Medicare Part D plan?

1) Assess your needs. What prescription drugs are crucial to your life style?

2) Consult your doctor and pharmacist. Make sure they are still in your network under the plans you are considering.

3) Review all plans and prices to see which is best fit for you.

The Open Enrollment period for Medicare Part D ends on December 31^st which gives you two more weeks to make some very important decisions. Plans begin on January 1, 2009 and late charges and penalties may apply if you wait too long.