Seniors who have recently reached the coverage gap in their Medicare prescription drug plan will soon receive $250 checks from the federal government. Over 300,000 one-time payments are in the mail, the Obama administration announced today.
The first round of approximately 80,000 checks was mailed to retirees in June. “Seventy percent of our first round of these $250 rebate checks were cashed within a week of eligible Medicare recipients receiving them,” says U.S. Department of Health and Human Services Secretary Kathleen Sebelius. “So, we know that folks really need some help.”
The Medicare Part D coverage gap, often called the donut hole, begins once a retiree has spent $2,830 on prescription drugs in 2010 and lasts until the patient spends $4,550 and catastrophic coverage kicks in. Checks will continue to be mailed monthly as more seniors fall into the donut hole. Medicare Part D recipients who qualify do not need to take any action and will automatically receive their payments.
The New York State insurance department issued a fraud warning today saying that some seniors have been contacted and asked for personal information such as their Social Security and bank account numbers in order to receive their rebate check. Some retirees have also been told, falsely, that they can get their check faster by paying an upfront fee. “This is simply not true,” says New York insurance superintendent James Wrynn. “Don’t give out personal information to anyone who calls you about the $250 rebate check.” Illinois attorney general Lisa Madigan says that seniors have also received calls from people who claim that the new health care reform law requires Medicare recipients obtain a new Medicare card, which is also untrue.
The Medicare rebate checks are the first step in closing the gap in Medicare prescription drug coverage. Medicare recipients will get a 50 percent discount on brand name prescription drugs beginning in 2011 and federal subsidies for generic prescriptions will begin in 2013. The qualifying amount for catastrophic prescription drug coverage will also be gradually reduced between 2014 and 2019 until the donut hole is completely eliminated in 2020.