Tuesday, January 24, 2006

Speaking of Donut Holes

We’ve talked before about the new Medicare Part D plan. One of its “features” is called the “donut-hole.” Well, that’s what most folks call it; CMS calls it the “TROOP” (True out of Pocket). Whatever.
The donut-hole comes into play whenever a covered person (“beneficiary” in Medicare parlance) reaches a specific threshold, and leaves that person without prescription drug cover until another threshold is reached. This is a very unusual arrangement:
Some HSA’s (high deductible Health Savings Account) plans have a corridor or co-pay amount that come into play between the co-insurance and the 100%. And, some "regular" medical plans have a hospital co-pay (typically $500) instead of a deductible.
There are also HRA (Health Reimbursement Arrangement) configurations which, by design, have a corridor where the employer subsidizes the deductible. But this is actually "a good thing" (to quote St Martha), as opposed to a gap in cover.
The Medicare D "donut hole," though, is the first (and only) plan I've seen with such a convoluted design, and which has such a LARGE gap. So it’s no surprise that, according to a recent study, “half of seniors have absolutely no plans to enroll for Part D benefits.” (hat tip: Bob Vineyard)
Anyone for a Krispy Kreme, instead?
For more on Medicare D, check out FoIB Kate Steadman's post at the new TPM Cafe Drug Bill Debacle Blog.

Many, many Thanks to Bob, Scott and Alan!
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