The Affordable Care Act or the healthcare reform law in 2011 gives a 50% discount on brand name drugs to seniors who are enrolled in Medicare Part D or a prescription drug coverage plan and have reached the doughnut hole or coverage gap.

The 50% discount starting Jan 1, 2011 is given when enrollees purchase drugs at a pharmacy or order them through the mail.  In 2011, a 7% discount is also given to cover the cost for generic drugs.

The following are the common questions and answers, cited from healthreform.gov and slightly edited.

What is the coverage gap, and how will I know if I've reached it? 

Some medicare prescription drug plans have a coverage gap in which you would have to pay 100% in the past. You start to pay 100% of the drug cost after you pay the amounts covered by their deductibles and copayment or coinsurance.

In 2011, according to healthreform.gov, the out-of-pocket cost due to the donut hole is $4,550 including the deductible and copayment or coinsurance.

Who in the coverage gap are qualified for the new savings? 

Starting in 2011, you are qualified if

• you're currently enrolled in a Medicare Prescription Drug Plan (including employer group health and waiver plans) or a Medicare Advantage Plan that includes prescription drug coverage;

• you don't get Extra Help (There is a Medicare program out there already that help people with limited income and resources to pay Medicare prescription drug costs);

• you have reached the coverage gap (After your deductible phase and copayment phase or having paid $2,840);

How does the 50% coverage gap discount work for brand-name drugs?  

The 50% discount comes from drug companies that make brand name prescription drugs.  You don't have to apply for the discount. The discounted drug prices will be automatically applied to your orders after you enter the donut hole.  But the whole cost or the tag prices will be used to tally the total cost so after it reaches $4,550, you will be qualified for catastrophic coverage.

Once I've entered the coverage gap, will all Medicare-covered brand-name prescription drug s be discounted? 

Companies need to participate in the discount program to offer the discount. In 2011, drug companies that produce more than 99% of the brand-name drugs used by people in Medicare have alreay participated in this program.  This means that almost all prescription drugs are covered by the disocunt program.

How is coverage for generic drugs changing in the coverage gap? 

The discount rates for both brand name prescrption drugs and generic drugs will change each year.

In 2011, Medicare part D will provide those in the doughnut hole with a 7% discount to cover the cost for their generic drugs. They will have to pay the remaining 93%.

The discount will increase each year from 7% in 2011 to 75% in 2020.  However, only the amount you pay will count toward getting you out of the coverage gap. The dispensing fee is also included as part of the cost of the drug.

What if I don't get a discount, and I think I should have?  

You should review your next Explanation of Benefits (EOB) notice. If you find the discount does not show up on the EOB, you should work with your drug plan to correct the record. And if your drug plan does not agree you are owned a discount, you can file an appeal from your State Health Insurance Assistance Program (SHIP) or by calling 1-800-MEDICARE (1-800-633-4227).  TTY users should call 

1-877-486-2048. 

What if I have other insurance?  

You are given the discount if Medicare Part D is your primary payer for your prescription drugs.  If your other insurance coverage pays second, they will pay after the discount has been provided.

What if I have coverage from a State Pharmacy Assistance Program (SPAP)?

If you're enrolled in a SPAP, or any other program that provides coverage for Part D drugs (other than Extra Help), you still get the 50% discount on covered brand-name drugs. The 50% discount is applied to the price of the drug before any SPAP or other coverage.   

I already get discounts from the company that makes my drugs. How will this new program affect these discounts?  

Patient assistance programs offered by drug companies are different than the Medicare Coverage Gap Discount Program. You can check with the drug company to find out if its assistance program will change.  

Will I get additional savings once I reach the coverage gap if I have a Medicare drug plan that already includes coverage in the gap?

Yes. You may get a discount after your plan's coverage has been applied to the price of the drug. Say your drug plan gets you a 60% discount on brand name drugs and you fill a $100 brand name prescription, you are supposed to pay $40. But with the 50% discount from Medicare Part D, you can only pay $20 out-of-pocket.

I already get Extra Help from Medicare to help pay my prescription drug costs. Can I get the discounts too? 

No.

What happens if I fill a prescription and only part of the amount is in the coverage gap? 

The 50% discount will only apply to the portion of your claim that's in the coverage gap.

How will I know if my prescription will be covered at a discount and what should I do if it isn't?  

Make sure to talk to your doctor and pharmacist to see if the prescription drugs you are give are covered by the discount.  If not, you may ask they give you the prescription drugs that are covered by the discount program.  

What additional discounts and savings will I have over time in the coverage gap?  

Over the next 10 years, you pay less in the coverage gap until it's closed by 2020.

By 2020, you will pay only 25% for covered brand-name and generic drugs during the gap, the same percentage you pay from the time you meet the deductible (if your plan has one) until you reach the out-of-pocket spending limit (up to $4,550 in 2011).

What you pay for Brand Name Drugs (DBND)

What you pay for Generic Drugs (DGD)

DBND DGD

2011 50% 93%

2012 50% 86%

2013 47.5% 79%

2014 47.5% 72%

2015 45% 65%

2016 45% 58%

2017 40% 51%

2018 35% 44%

2019 30% 37%

2020 25% 25%

From healthcare.gov with slight modification