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Friday October 13, 2006

How to keep from losing money down the donut hole

by robert goldberg & toby rogers

Many seniors are falling into the “donut hole,” the coverage gap phase of Medicare Part D during which enrollees are responsible for the cost of their prescription drugs.

Medicare pays 75 percent of annual drug costs up to $2,250 after a $250 deductible for most seniors. But then the program pays nothing until drug expenses reach $5,100, after which the government pays 95 percent of all costs. So seniors are on their own for costs between $2,250 and $5,100

Many seniors are facing high out-of-pocket costs simply because they don’t have enough information. Many could improve their situation by choosing a different plan — one that covers more of their out-of-pocket costs in exchange for a higher premium. Beneficiaries may switch plans between Nov. 15 and Dec. 31.

But even without switching plans, they can begin to save money immediately, by choosing less expensive brands and generic alternatives. This could help many seniors save hundred of dollars a month.

Seniors can beat the “donut hole” now by comparing and shopping for lower-priced drugs. For example, for three of the major Part D plans, a switch of just one of the 10 most-prescribed drugs to a lower-priced equivalent can create savings ranging from 46 percent to 98 percent per drug.

Seniors can get information on these money-saving alternatives for each of their prescriptions on the Internet at no cost. The Web site DestinationRx.com has developed a tool for reducing out-of-pocket drug costs in Medicare drug plans called the Rxaminer Part D Optimizer and is making it available free to seniors at www.PartDOptimizer.com.

The tool employs a three-step process to help individuals quickly identify lower-cost alternatives to their medications, including plan-preferred options and generics.

For seniors who have reached the “donut hole,” especially seniors who take multiple drugs, cost comparing can translate into thousands of dollars.

Using the Part D optimizer, all seniors can choose the plan most appropriate for their needs for 2007, minimizing the coverage gap or eliminating it altogether.

Robert Goldberg is vice president of The Center for Medicine in the Public Interest in New York City. Toby Rogers is president of DestinationRx.

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