$250 Medicare Part D Rebate Checks to Begin

The one-time payments will be mailed to retirees who qualify in June.


Seniors who have high prescription drug costs will soon receive government payments. The first $250 rebate checks for retirees who have reached the Medicare Part D coverage gap will be mailed out on June 10, 5 days ahead of schedule, Health and Human Services Secretary Kathleen Sebelius announced yesterday. The one-time payments, created by a provision of the health reform bill, will continue to be sent out monthly as more seniors fall into the coverage gap.

[See How the Health Care Bill Impacts Retirees.]

The Medicare Part D coverage gap – often referred to as the donut hole – begins when a senior has spent $2,830 on prescription drugs in 2010 and lasts until catastrophic coverage kicks in when a patient has spent $4,550 out-of-pocket on medications. Seniors enrolled in a Medicare Part D plan who have already spent over $2,830 on medications this year will automatically receive their payments and do not need to take any action. There is no required application or paperwork. Approximately 80,000 checks are currently scheduled to be mailed to retirees in June.

[See How to Pick the Best Medicare Part D Prescription Drug Plan.]

The $250 rebate checks are the first step in closing the Part D donut hole. Beginning in 2011, drug manufacturers will be required to provide a 50 percent discount on brand-name prescriptions to seniors in the coverage gap. Federal subsidies for generic prescriptions will also be phased in beginning in 2013. The qualifying amount for catastrophic coverage will gradually be reduced between 2014 through 2019. The donut hole will be completely eliminated in 2020.