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Earlier this week President Obama spoke with seniors at a town hall meeting in regards to the Medicare Part D prescription benefit, and talked about how many of those seniors would be receiving a $250 check in the mail as a result of the health care reform passed earlier this year. Today I thought I would explain a bit more about that rebate check being sent out, who will get it, and when they can expect it.

What is the Medicare Doughnut Hole?

One thing that may not have been explained adequately is – just what exactly is the Medicare doughnut hole?

From HealthCare.gov

Medicare Part D provides prescription drug benefits to Americans on Medicare. This benefit comes with a $310 deductible. After you’ve spent $310, you pay 25 percent of the cost of your prescriptions until the total cost of all the medicine you have received in a year hits $2,830. Then, you are stuck with 100 percent of the bill until the total cost of your medicines hits $6,440. The gap when Medicare does not cover the cost of your prescription drugs is known as the doughnut hole. Health reform will close the doughnut hole. Reform also offers immediate relief by providing a $250 rebate this year to seniors who hit the doughnut hole.

According to CBS News White House Correspondent Mark Knoller the checks could start going out as early as this week.

Obama says as more seniors hit the donut hole, more checks will hit the mail – helping 4 million seniors by the end of this year.

So over 4 million checks being sent by the end of the year – that’s a lot of people in the doughnut hole!

Who Will Get A $250 Medicare Donut Hole Check?

Ok, so how do you qualify to get a check? First, you have to be signed up for the Medicare Part D prescription drug benefit. Here’s how it works:

The prescription drug benefit has a $310 deductible.

Once the deductible is paid, Part D covers 75% of your benefit up to $2,830.

After $2,830 in drugs are paid for, you’ll have to pay 100% of your drug costs, up until $6,440.

After $6440 Part D pays for 100%.

If you are stuck in the $2,830-$6,440 doughnut hole, you should be receiving a check to help offset the costs.

So if you’re stuck in the doughnut hole you’ll be receiving a small amount of help via the check to help pay for your drugs.

When Are The Checks Being Sent?

The checks are starting to be mailed out this week, and as mentioned above as many as 4 million seniors will receive the check by year’s end.

The $250 checks will be mailed by the Department of the Health and Human Services (HHS), and the HHS logo (see image above) will be clearly displayed on the envelope. It will also include Medicare’s 1-800 toll-free number in case Medicare beneficiaries have any questions. It should be noted that the checks will be mailed by one of Medicare’s contractor. The envelope will include the contractor’s Wisconsin address in case any checks are returned for follow-up.

So if you’re already in the donut hole for the year, keep your eye out for your check in the mail – it should be on it’s way.

Note: There is no need to go through an application process or file anything to receive your check. Once you reach the threshold, the check will be sent automatically.

Medicare Part D Donut Hole Starts Going Away In 2011

The Health Care Reform bill that goes into effect soon made changes that will include closing the donut hole gap.

Among the donut hold changes:

Beginning in 2011, seniors in the donut hole will receive a 50 percent discount on prescription drugs.

The Medicare share of costs will increase so that the donut hole will be completely closed in 2020

Stay tuned for further developments!

Are you slated to receive your check this year? Will it make much of a difference for you? How do you feel about the rebate checks? Tell us your thoughts in the comments.

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