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'Donut Hole' Savings for Seniors

By Lisa Zamosky

Donut Hole

In a rare piece of good news about the cost of health care, the Obama administration announced last week that in 2011, 3.6 million seniors on Medicare saved .1 billion on prescription drug costs.

The savings are the result of a provision of the health reform law which will steadily shrink and ultimately eliminate the gap in Medicare Part D prescription drug coverage known as the donut hole. Seniors who hit the donut hole last year saved an average of 4.

The Law’s Benefits

This year, if you enter the donut hole you’ll receive a 50% discount on covered brand-name drugs and a 14% discount on covered generics. The gap in drug coverage begins once you reach your Medicare Part D plan’s initial coverage limit, which in 2012 is ,930. It ends when you spend a total of ,700. Prior to the law taking effect, if you entered the donut hole, you paid full price for your medication.

Additional Savings

Last week, the government also announced that between 2011 and 2021 Medicare savings should total about ,200 per person.

Part of that savings comes from the availability of preventive health services with no cost sharing. Last year, Medicare began covering the full cost of certain types of preventive care, such as annual wellness visits, cholesterol and other cardiovascular screenings, as well as cancer screenings such as mammography and colonoscopies. Seniors no longer pay annual deductibles, co-pays, or coinsurance for these services.

And starting at the beginning of this year, if you have Medicare coverage, there are five new health screenings the Centers for Medicare and Medicaid Services (CMS) added to its list of free services. These include:

  • Annual depression screening
  • Obesity screening and behavioral counseling
  • Annual cardiovascular screening
  • Annual alcohol misuse screening
  • Sexually transmitted disease and infection screening (for people that have certain risk factors)

You can see the full list of preventive services covered at

Share your experience: Have you seen your health care costs reduced as a result of doughnut hole discounts and free preventive care? Share your experience in the comments section below.

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