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Donut Hole Insurance Explained When one first hears about Medicare, the typical thought is similar to Social Security - it's a fully paid government benefit one gets in retirement at age 65. In reality, Medicare has a financial gap of coverage in the area of cost most people experience when taking care of their health needs, particularly pharmaceuticals. This gap, known as the donut hole has frustrated and created a financial obstacle for thousands of people annually. As a result, many used to pay for donut hole insurance to obtain financial coverage not provided by the government. Unfortunately, that option doesn't exist anymore. In some ways, the donut hole saves the government from having to pay for numerous lower-level medical costs of seniors that can probably be paid out of pocket. This saves taxpayers from covering every little ailment and instead reserves the funds for serious health needs such as surgery, cancer treatment, accident recovery and similar significant assistance. In others though, the donut hole blocks people from getting care when they can't come up with out-of-pocket funds to pay bills until they reach above the donut hole limit to be covered again. Background The donut hole gap represents a financial point that begins at a specific dollar amount and continues until the Medicare member reaches an aggregate dollar ceiling specified by the federal government. Once reached, Medicare coverage kicks in again and the affected patient no longer has to pay out-of-pocket. This gap, built into the Medicare 2003 redesign as a component of Medicare Part D, affects costs incurred associated with prescription drugs. The actual law change is known by a big fancy name, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. It didn't take effect until January 2006, however. Most in government refer to it as the MMA Act or Medicare Reform. The Act broke up Medicare into four different parts. Parts A and B provide for in-hospital and out-patient services. Part C acts as an HMO program in lieu of Parts A and B if one signs up for a Part C plan instead. Some folks like to deal directly with Medicare providers, while others prefer an HMO-style approach that they had when still working. The multiple parts give them a choice. Part D represents the medical drug coverage part of Medicare. It can be incorporated into Part C or it can be handled separate. The Act also eliminated the ability to buy private donut hole coverage. Despite significant amount of government press, documentation, guide books, pamphlets and video programs, new Medicare members continue to be rudely surprised by the existence of the donut hole financial gap and lack of coverage solutions, especially when it kicks in and they have to pay a full medical bill out-of- pocket. For seniors, the financial gap is just downright frustrating and insulting. After spending a lifetime working, paying taxes, and finally being allowed to claim long-promised Social Security and Medicare coverage dangled in front for decades, paying a full medical bill after the fact is about as tasty as swallowing castor oil. Additionally, the other parts of Medicare are not free either. While the federal program does cover a significant amount of health expenses seniors incur, they still have to pay a monthly premium bill to receive the services of Parts A and B.
An easy to understand guide to “Donut Hole Insurance”
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