Clarification of Medicare Coverage: Your Increase May be Unrelated to ObamaCare

Medicare coverage, limits, and other parameters can be confusing and frustrating when what we thought was covered is not. In a public post earlier this week I came across a question we believe should be answered here, to shed some light on the subject for you, our readers.

Question originally posted on Facebook:

“In discussing the increased cost of healthcare today a friend just shared a huge bump in his medication cost. He takes 3 capsules per day of the CREON pancreatic enzyme supplement. In visiting his local pharmacy he was told that the retail cost for a 30 day supply of these capsules was increased from $300 to $700 based on his taking 3 per day with meals. I guess Medicare co-pay is being cut as a result of Obamacare. Perhaps someone can enlighten me on this huge cost increase.”

With a follow-up post by the same person: “The rest of the story. His pharmacist said there is no substitute or generic alternative for the CREON capsules. His actual cost for a months supply jumped from $80 to well over $200.”My Response:

“If your friend has a Medicare Prescription Drug Plan, I would imagine, given the cost of his medication, that he has reached the gap in coverage, also known as the donut hole.  After his deductible has been met he would pay co-pays until total yearly drug costs reach $2930.00 for 2012.  When that amount has been reached he falls into the gap in coverage.  What Medicare means by total yearly drug costs is the combined total of any deductible, co-pay and amount the insurance company paid.  For example $5.00 co-pay, insurance company pays $95.00, Medicare will count $100.00 towards total yearly cost. Once you enter the coverage gap, you get a 50% discount on covered brand name drugs and pay 86% of the plan’s cost for covered generic drugs until you reach the end of the gap. The gap ends when he has true out of pocket costs of $4700.00.  The gap should have been explained to your friend when he purchased his plan.  This has nothing to do with the Affordable Care Act. If you would like to contact me you may e-mail me at ostdiekgrp@gmail.com.  In the interests of full disclosure I am an insurance agent and I sell Medicare Prescription Drug Plans.” — Tom Ostdiek, President and Broker of Ostdiek Group, Inc.