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The Affordable Care Act Eliminates the Doughnut Hole

As part of the new Affordable Care Act (ACA), the legislation manages to reinvent health care but also significantly reduce the doughnut hole gap that has plagued the Medicare program and put a great deal of strain on senior citizen’s finances which were already stretched thin.

What is the Doughnut Hole?

Lots of people had a Medicare drug plan that has a coverage gap which triggers something experts have dubbed the doughnut hole effect. Instead of having a set amount you have to pay for your drugs each time you fill a prescription, Medicare agrees to cover the cost, but only up to a point. Once you have exceeded the amount that Medicare agreed on covering, you’ll be responsible for covering the rest of your monthly prescription bill, creating all kinds of stress and problems if you’re already on a fixed income and don’t have much extra pocket money each month and your doctor has just put you on a new and expensive medication.

The worse part of the situation is that many of the senior citizens don’t even know that they’re going to have to pay more for their prescription drugs until they get their Explanation of Benefits, which is sent out monthly. The letter shows how much you’ve spent on prescription medications, and how much available coverage remains before you enter the doughnut hole.

Calculating the rate the doughnut hole gap has expanded since 2003, financial experts predict that if things follow the same line of progression, the gap could cost senior citizens an extra $6,000 each per year by the time 2020 rolls around.

The Doughnut Hole Starts to Close

Rectifying the doughnut holes might very well be one of the best things the Affordable Care Act does.

Some of the financial strain individuals struggling to cope with the doughnut hole gap was relieved in 2012 when the ACA system implemented a change that provided them with a 50% discount on any generic brands of prescriptions they need, and a 14% discount on the name brands. In 2013 the discounted percentages will increase to 52.5 and 21%.

It’s important to note that the doughnut hole won’t go away over night. The way the program has been set up, the hole will gradually close over time. It’s projected that by 2020 the doughnut hole should be completely closed up once and for all.





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