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Back in December, I heard about Lois, a senior citizen in Nebraska, who had reached the “donut hole” (coverage gap) in her Part D prescription coverage.  Like many people her age, Lois was managing several chronic health conditions – high blood pressure, heart disease, and the recent onset of diabetes.  She was staying healthy and active with the help of a regimen of prescription medicines, but the costs were adding up.  Faced with paying all of those costs on her own in the coverage gap, Lois was starting to worry about making ends meet.

Fortunately, Lois received a happy surprise at her pharmacy when she showed up to pay that first bill in the gap – the total was much lower than she expected.  In fact, her brand-name drugs had been discounted 50% and her low cost generic medications were more affordable as well.

Lois directly benefitted from the increasing discounts that many seniors enjoy in the coverage gap, a result of the Affordable Care Act.  Those discounts, combined with savings from switching to a new Part D drug plan in 2012 that offered her better coverage, will help Lois save thousands of dollars on her drug costs this year.

With the gradual closing of the coverage gap, the Affordable Care Act is making Medicare drug coverage more affordable for Lois and many other people with Medicare. The coverage gap is that stage in Part D prescription coverage that starts when you and your drug plan have spent a certain amount of money for covered drugs and stops if you need catastrophic coverage. Catastrophic coverage kicks in if you pay $4,700 in 2012 for out-of-pocket drug costs (your plan will cover most of your drug costs above that amount). Another plus—the discounts you receive on brand-name drugs count as out-of-pocket drug costs, helping you get out of the coverage gap.

And there’s more to come because of the health care law. People with Medicare will get greater savings each year until the coverage gap is closed in 2020. Next year, for example, you’ll save 52.5% on brand- name drugs and 21% on generic drugs in the gap. By 2020, you’ll save 75% on brand- name drugs and 75% on generic drugs when you’re in the coverage gap.

As we celebrate the two-year anniversary of the health care law, we also celebrate the fact that these savings can be huge: over 5.1 million people with Medicare saved more than $3.2 billion on their prescriptions in 2010 and 2011—that’s an average of about $635 per person.  For most people I talk to, these savings aren’t pocket change – they are meaningful.  Just ask Lois.

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A counselor at the SHIP helped her apply for Extra Help and found her a new Part D plan that better fit her needs. Now she spends no money on her premium and very little on her prescriptions – saving her thousands of dollars over the course of the year. She is just one of many people that can save money – and you could be one too.

Medicare Savings Programs

If your monthly income is less than $1,277 ($1,723 as a couple), you may be able to save money with these 4 different Medicare Savings Programs that help pay for premiums and more:

• Qualified Medicare Beneficiary (QMB) Program
• Specified Low-Income Medicare Beneficiary (SLMB)
• Qualified Individual (QI) Program
• Qualified Disabled and Working Individuals (QDWI)

Each program has a different monthly income limit – get more information about the 2012 limits and how to find out if you qualify.

Extra Help

Many people with limited income and resources may qualify for Medicare’s “Extra Help” program, but they must apply to find out. You could be one of them. You may qualify if you have up to $16,755 in yearly income ($22,695 for a married couple) and up to $13,070 in resources ($26,120 for a married couple). Get more information about Medicare’s “Extra Help” program.

You can get help with Part D prescription drug coverage premiums, deductibles and copayments. This means you don’t have to go without medications because you can’t afford them, and can get help just like our 90-year-old friend in Oklahoma.

It’s easy and free to apply for “Extra Help.”

Save money, live well, and share the information.

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