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.

• Part A: Hospital insurance- helps pay for hospice care, inpatient hospital care, and skilled nursing facility care. Individuals are entitled to Part A if they contributed payroll taxes for 10 years or more while they worked.
• Part B: Supplementary Medical Insurance- helps pay for physician services, outpatient care, preventive services, x-rays, diagnostic tests, and mental health services. It is funded primarily by premiums.
• Part C: Medicare Advantage- provides care through managed care plans. Plan C provides Parts A, B, and D benefits.
• Part D: Prescription drug plan- enrollment is voluntary and is provided by private prescription drug plans or Medicare Advantage prescription drug plans.
• Medigap- refers to private supplemental health insurance plans sold to Medicare beneficiaries. It covers medical expenses that may not be covered by the Original Medicare plan.
• Original Medicare- a fee-for-service plan that covers many health care services and drugs but doesn’t pay for all health care costs. There are costs such as coinsurance, copayments, and deductibles that you must pay. It includes Medicare Part A and Medicare Part B.
• Monthly premium- a monthly payment to Medicare, an insurance company, health care plan or drug plan for health coverage.
• Annual deductible- The amount you pay for medical services and prescriptions before your health insurance plan or Medicare plan kicks in and begins to pay.
• Coinsurance- The amount you may be required to pay for services after you pay any deductibles.
• Copayment- an amount you pay for services such as a doctor’s visit or specialist visits regardless of whether you have fully paid your deductible.

These are just some of the terms you should be familiar with when you are dealing with your Medicare plan or when you are choosing a Supplemental Medicare plan. They can help you to better understand the process and make an informed decision about the right plan to choose. Other ways to stay informed is to talk to your health insurance representative or carrier and stay current with insurance news.

Of course there are some disadvantages. If, as of December 31 you have prescription drug coverage, you must continue to keep the coverage. If you did not have prescription drug coverage, you cannot add it to your plan.

The main reason why individuals may want to buy supplemental Medicare coverage is because Original Medicare offers limited coverage. Adding a supplemental plan, also add extra benefits, especially for those individuals with disabilities and pre-existing conditions. Medicare Advantage plans are required to cover any individual with pre-existing conditions.

Once the current enrollment is closed on March 31, beneficiaries have limited options to switching their coverage. There are only a few reasons that an individual may be able to change their plan. These specific reasons include:

• Turning 65 after the open enrollment period is closed
• As determined by the Social Security Administration, any individual can join a plan three months before or after their 25^th month of disability
• Permanent home change is grounds for switching plans. If you move out of your plan’s service area, you’re eligible to switch plans.
• If an individual move into or out of a nursing home, they can enroll in a new plan anytime during the specified year.

So if for any reason, you would like to switch your plan to best fit your needs, you still have time. Make sure you call your health insurance provider immediately to get the most out of your insurance.