Deal Could Benefit Seniors Who Need Gap Insurance

Seniors could get a break on their gap insurance needs under a new proposal from the Obama administration.

This week, the White House announced that it had reached a deal with the pharmaceutical industry where companies will contribute some $80 billion over the next decade to help reduce the cost of prescriptions for seniors. Gap insurance helps seniors with a current provision in federal law where Medicare will cover the first $2,700 in costs in any given year, and then patients will be responsible for additional costs up to $6,153. After that point, Medicare coverage kicks in once again.

The money from the pharmaceutical industry will be used to help provide seniors with discounts if they face financial hardships because of that Medicare gap. "The existence of this gap in coverage has been a continuing injustice that has placed a great burden on many seniors. This deal will provide significant relief from that burden for millions of American seniors," said Obama. The deal will be useful to those currently relying on gap insurance to help meet their healthcare costs.