Medicare update: Doughnut check's in the mail

Rebate checks are coming to the rescue of Medicare beneficiaries whose drug costs place them in the plan’s “doughnut hole,” the gap in coverage after a beneficiary has accumulated drug costs of $2,830 but before he or she has spent $4,550 out of pocket.

Health and Human Services Secretary Kathleen Sebelius recently announced that the first round of $250 checks will be sent in early June to approximately 80,000 seniors who have already been caught in the doughnut hole. Thereafter, checks will go out monthly until some four million beneficiaries have been paid.

The onetime rebates will precede next year’s benefit, a 50 percent reduction in the cost of brand-name prescriptions once the doughnut hole has been reached. This discount will gradually be increased to 75 percent in 2020, greatly lessening the impact of the coverage gap.