DEAR SAVVY SENIOR: I’m about to reach the “doughnut hole” coverage gap for my Medicare Part D plan. I would like to know more about the new discounts that Medicare is offering, and any other suggestions you may have on how to save on my prescription drugs. — Paying Too Much

DEAR PAYING: For millions of seniors, the downside to Medicare’s Part D prescription drug plans has always been the coverage gap — also known as the doughnut hole. But starting this year, financial relief is available. Here’s what you should know:

As part of the new health care reform law, Medicare Part D beneficiaries who reach the doughnut hole this year will receive a 50 percent discount on their brand-name drugs and a 7 percent discount on their generic medications.

Those discounts will kick in once your total drug costs for 2011 reach the starting point of the gap, $2,840 (which includes your share and the insurer’s share of the costs). You will remain in the gap until your out-of-pocket costs (not counting the insurer’s share) reach $4,550 for the year. At that point you emerge from the gap and qualify for catastrophic coverage, with your Part D plan picking up around 95 percent of your tab.

With the gap discounts, it’s important to understand that the entire cost of the drug (including the 50 percent discount and the 50 percent you pay) will be counted toward the amount you need to emerge from the coverage gap. The discounts will not leave you stuck in the doughnut hole longer!

With the 7 percent discount on generic drugs during the coverage gap, you will pay the remaining 93 percent of the price. But only the 93 percent will count toward leaving the doughnut hole.

You can find more detailed information on the discounts at www.closingthecoveragegap.info.

In addition to the discounts, there are other things you can try to lower your drug costs in the doughnut hole. For starters, ask your doctor if there’s a generic or less expensive brand-name drug you could switch to. About 75 percent of all premium drugs on the market today have a lower-cost alternative.

You may also be able to save money by finding pharmacies that offer lower prices or by using a mail-order pharmacy. To find cost savings information on generics, less expensive brand-name drugs and mail-order pharmacies, see www.medicare.gov/find-a-plan.

Another cost-cutter is to buy your medications in bulk. Many pharmacies give discounts if you buy a three-month supply of drugs versus a 30-day supply. Also, find out from your doctor or pharmacist if the pills you’re taking can be cut in half. Pill splitting allows you to get two months worth of medicine for the price of one. If they can be split safely, you’ll need to get a prescription from your doctor for twice the dosage you need.

If you’re living on a limited income, you may be eligible for “Extra Help” paying for your prescription drugs. To be eligible, your annual income must be less than $16,245 for an individual and $21,855 for a married couple living together. And your assets must be limited to $12,640 for singles and $25,260 for married couples. The value of your home and automobiles are excluded. To learn more, call Social Security at (800) 772-1213 or see www.ssa.gov/prescriptionhelp.

In addition to the Extra Help program, some pharmaceutical companies offer discounts that help seniors enrolled in Medicare drug plans (see www.medicare.gov/pap). And many states offer help in paying drug plan premiums and/or other drug costs. Find out if your state has a program by visiting www.medicare.gov/spap.asp. Also visit www.benefitscheckup.org to search for national and community-based charitable programs that can help with your drug costs. 

Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit SavvySenior.org. Jim Miller is a contributor to the NBC “Today” show and author of “The Savvy Senior” book.

— Hometown Content