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Medicare update: Doughnut check's in the mail

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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.

At a press conference detailing the new Medicare, Sebelius warned seniors against anyone claiming that action is required to receive a rebate check. “Seniors do not have to do anything to get this check. They don’t have to sign anything. They don’t have to apply for it,” said Sebelius. (Beneficiaries’ billing history will be monitored and checks automatically issued once the coverage gap is reached.)

Sebelius’s announcement comes amid continued public apprehension, particularly from seniors, about the Obama administration’s reform of health care.