With the transition to President Trump and a full Republican Congress, the Affordable Care Act is likely to be repealed and replaced with a new healthcare system. When it was first introduced during the Obama administration, the ACA affected nearly every facet of healthcare. One of the portions of healthcare that was altered substantially was that of Medicare.
Generally, Medicare was reformed to introduce a few cost-cutting solutions that were meant to cause care providers to focus even more on providing their customers with high quality care and less on the expenses that they could charge to Medicare. These changes have also affected what is known as the "donut hole". These changes have been largely positive. However, with Trumpcare looming, there are many ways in which the "donut hole" could be affected if the bill is signed into law.
What is the Donut Hole?
The "donut hole" is a term that typically refers to a gap that exists between the set coverage limit for prescriptions and the catastrophic limit that's reached when seniors spend the max of out-of-pocket costs with their drug plan. When a senior citizen purchases Medicare Part D to cover their prescription medications, they are required to pay any amount of the prescription left over after insurance pays for a portion of the costs.
Eventually, Medicare was unable to cover the costs for prescription medications, leading to the development of the "donut hole". To better understand all that the "donut hole" entails, it's important to be aware of the main components of Medicare Part D coverage. For 2017, anyone who purchases a Medicare part D plan will be provided with coverage of up to $3,700 throughout the year, though a $400 deductible is applied.
Once your out-of-pocket costs reach $4,950, every expense afterwards is deemed catastrophic and is automatically covered almost entirely. There are still co-pay costs that the person enrolled into the plan will be subject to. The "donut hole" is the amount between the first portion of your coverage and the catastrophic coverage.
You would typically be required to pay all costs once you're in the "donut hole". However, the ACA introduced some new reform measures that help seniors who fall into this gap. Anyone enrolled in a Medicare Part D Plan will have 60% of costs paid for when buying popular brands of prescription medications and up to 49% for any generic medications, which helps to save the person enrolled into the plan a lot of money.
With each passing year, the ACA reduces the gap between the first portion of coverage and catastrophic coverage. It's believed that this gap will be gone entirely by 2020 if the ACA stays in place. However, with the possibility of Trumpcare being introduced and signed into law, many people worry about how this new healthcare plan will change the reform brought about by the ACA.