The government is starting to mail out the tax free $250 medicare gap checks to seniors who fall into the program’s gap in prescription drug coverage. This so called Medicare “doughnut hole,” payment was part of the recently enacted Health care reform bill. If you have Medicare prescription drug coverage, and aren’t already getting Medicare Extra Help, Medicare will automatically send you a one-time $250 rebate check after you reach the coverage gap. The Explanation of Benefits notice, which your drug plan mails to you each month when you fill a prescription, will tell you how much you’ve spent on covered drugs and whether you’ve entered the coverage gap.
The first checks will be sent June 10, three weeks earlier than scheduled, to about 80,000 people. The Centers for Medicare and Medicaid Services said checks will be mailed monthly throughout the year as Medicare beneficiaries hit the donut hole. Beneficiaries can expect to receive their check within 45 days after that. The Department of Health and Human Services estimates that about 4 million seniors will get the rebates in 2010.
The $250 payment to offset the Medicare drug coverage gap - known as “doughnut hole” – a big, expensive gap in coverage that affects millions is among the first to be addressed under the new health care law and while in effect immediately, it will take a few months for the rebate to be paid. The coverage gap or doughnut hole, refers to the lack of Medicare coverage for out-of-pocket drug costs between $896.25 and $4,350.25. Medicare covers 75% of costs less than $896.25 and 95% of costs over $4,350.25. In 2011, Medicare eligible participants would also receive a 50% discount on brand name (non-generic) drugs.
The CMS also warned of potential scams, noting that qualifying seniors will receive their checks automatically and are not required to fill out any forms. You don’t need to provide any personal information like your Medicare, Social Security, or bank account numbers to get the rebate check. Don’t give your personal information to anyone who calls you about the $250 rebate check. Call 1-800-MEDICARE (1‑800-633-4227) to report anyone who does this. You can also call this number if you have not recieved your expected check.
This rebate is the first step toward closing the Medicare prescription drug coverage gap. Starting in 2011, seniors who fall into the donut hole will receive a 50% discount on brand-name drugs. The discount for generic drugs will be 7%. Those figures will rise over the years, eventually reaching a total 75% discount that effectively will eliminate the gap in 2020.
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