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Medicare rebate checks are in the mail

The $250 checks are the first step in closing the dreaded 'doughnut hole' in Medicare prescription drug coverage.

By Karen Datko Jun 8, 2010 5:13PM

This week the federal government will begin sending out $250 checks to Medicare recipients who have reached the dreaded "doughnut hole" in Medicare prescription drug coverage. Recipients can thank health care reform for the extra help. 


If you are eligible -- more on that below -- you don't have to apply for the $250 rebate. So, if anyone is offering you an application to qualify or to expedite the money, that person is out to steal your personal information. 

Are you going to get a check? We've heard from a dear octogenarian friend of ours that confusion exists about the who, what, when and how of this new benefit. Here's what you need to know:


To be eligible for the $250 check:

  • You must be enrolled in Medicare prescription drug coverage, known as Medicare Part D. (However, you will not get the check if you're receiving Medicare Extra Help. Those recipients never encounter the doughnut hole and thus aren't eligible.)
  • You must have entered the coverage gap, known to every senior as the doughnut hole. The Explanation of Benefits notice from your drug plan, which you receive each month, will let you know when you're there. (Word to the wise: Always keep your drug purchase receipts, just in case there's a mix-up.)

About 80,000 checks will go out this week to Part D participants who have already entered the doughnut hole this year. A new batch will go out every month as more people enter the coverage gap. An estimated 4 million Medicare recipients will get a $250 rebate check this year.


You should get the $250 check within 45 days after entering the doughnut hole. If you don't get the check in a timely fashion, make sure your prescription drug plan has provided all necessary information to Medicare. If you still don't get the check, call Medicare toll-free at 1-800-MEDICARE, which is 1-800-633-4227 for those who hate hunting for the tiny letters on the phone. (I know I do.)


Remember: This check will arrive automatically. You DO NOT have to apply. Medicare says:

Don't give your personal information to anyone who calls you about the $250 rebate check. Call 1-800-MEDICARE (1-800-633-4227) to report anyone who does this. TTY users should call 1-877-486-2048.

Keep in mind that the $250 check is tax-free. It's also a one-time deal. However, it is the first step in closing the doughnut hole. explains:

Next year, seniors who reached the coverage gap will get a 50% discount on any brand-name drug they purchase during the coverage gap; the rate will increase yearly until 2020 when the gap is eliminated completely.

Just what is the doughnut hole? That can be confusing, too. Luckily, Kristen Gerencher wrote this at MarketWatch:

Here's a refresher on how Medicare drug coverage works in 2010. Under the standard Part D plan, beneficiaries are responsible for the first $310 of drug spending. That's the deductible. "After that, their prescription plan covers 75% of the drugs' cost and the enrollee is responsible for the remaining 25%," (Cheryl Matheis of AARP) said. Once an enrollee has total drug costs of $2,830, by which time he has paid $940 out of pocket, he then falls into the doughnut hole, which makes him responsible for the next $3,610 in drug costs.

Catastrophic coverage kicks in after that, and the participant is responsible for paying only 5% of the cost of prescriptions.


You can find out more at Look under the "What's New?" section.

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