Copyright 2006 Jeremy Cockerill
Many seniors who have signed up for the Medicare Prescription Drug plan are shocked to find out that they are already hitting the dreaded gap in coverage known as the “doughnut hole”. During this gap in coverage, between $2250 and $5100 in prescription drug spending, Medicare Part D participants lose coverage, must continue to pay their monthly premiums and are 100% responsible for paying for their medications themselves. Once they hit the doughnut hole, this massive jump in monthly medication expenditures makes it very difficult for some Plan D participants to cope financially.
In a recent Business Week article, Bruce Stuart, director of the Peter Lamy Center on Drug Therapy & Aging at the University of Maryland, estimated that about 38% of Medicare beneficiaries are at risk of hitting the doughnut hole this year. This estimation means that 7 million to 10 million participants could hit the doughnut hole and lose coverage for part of this year.
“Seniors were expecting to receive a benefit that would help them save money all year long and now they are getting slapped with massive monthly medication bills part way through the year.” says Jeff Uhl, president of Universal Drugstore, a Canadian mail-order pharmacy. “Our customers are really angry about having to pay full U.S. retail price once they hit the doughnut hole and they are rushing back. People are realizing that they can save much more filling their prescription with our pharmacy once they hit the doughnut hole.”
At an average savings of 42% less than U.S. retail prices, individuals can find substantial savings filling their prescriptions at a licensed Canadian Pharmacy once they reach the doughnut hole. The $2850 worth of medications that individuals have to pay for personally while in the coverage gap would cost an average of 42% less in Canada. That means that instead of paying $2850 for their medications while in the doughnut hole, an individual could purchase the exact same medications, in Canada, for about $1650.
As an example, someone ordering Lipitor 20mg through their Medicare Part D plan while in the doughnut hole would have to shell out $348 dollars for a 90 day supply. The same 90 day supply of Lipitor 20mg is a much more reasonable $195 at Universal Drugstore. That is a savings of $153 dollars or 44% less.
“U.S. seniors need to be told about this option,” Uhl urges. “Seniors who hit the doughnut hole but are not going spend enough to come out on the other side of the doughnut hole are being duped if they buy their drugs through their Medicare plan while experiencing this gap in coverage. By purchasing their medications from Canada while they are in the doughnut hole these individuals can truly maximize their savings.”
A recent Los Angeles Times article reported that the gap in coverage could change next year to between $2400 and $5,451. This would mean an even bigger gap in coverage next year and therefore more money out of Part D participants’ pockets. How big the coverage gap will grow in future years can only be speculated.
Although purchases at Canadian pharmacies do not count towards an individuals out-of-pocket expenses Medicare Part D participants may want to consider using a Canadian pharmacy. Using a Canadian Pharmacy in the right situations can provide substantial savings to seniors. Some people suggest that seniors use a Canadian pharmacy when a drug is not covered by their plan or when they reach the $2850 gap in coverage but will not reach the other side of the doughnut hole where they can take advantage of the catastrophic coverage portion of Part D.
With all the confusion with Medicare Part D plans it is difficult for seniors to know what is their best course of action. For many Medicare-eligible individuals using a Canadian pharmacy as a part of their annual prescription drug purchasing game plan is something they should seriously consider.