$250 Medicare Drug Coverage Gap Rebate for Seniors To Be Paid in 2010 Under Obama Health Care Reform

This article was last updated on July 5

[Update] The government is starting to mail out the tax free $250 medicare gap  checks to seniors who fall into the program’s gap in prescription drug coverage. This so called Medicare “doughnut hole,” payment (detailed below) was part of the recently enacted Health care reform bill. If you have Medicare prescription drug coverage, and aren’t already getting Medicare Extra Help, Medicare will automatically send you a one-time $250 rebate check after you reach the coverage gap. The Explanation of Benefits notice, which your drug plan mails to you each month when you fill a prescription, will tell you how much you’ve spent on covered drugs and whether you’ve entered the coverage gap.

The first checks will be sent June 10, three weeks earlier than scheduled, to about 80,000 people. The Centers for Medicare and Medicaid Services said checks will be mailed monthly throughout the year as Medicare beneficiaries hit the donut hole. Beneficiaries can expect to receive their check within 45 days after that. The Department of Health and Human Services estimates that about 4 million seniors will get the rebates in 2010.

The CMS also warned of potential scams, noting that qualifying seniors will receive their checks automatically and are not required to fill out any forms. You don’t need to provide any personal information like your Medicare, Social Security, or bank account numbers to get the rebate check. 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. You can also call this number if you have not recieved your expected check.

This rebate is the first step toward closing the Medicare prescription drug coverage gap. Starting in 2011, seniors who fall into the donut hole will receive a 50% discount on brand-name drugs. The discount for generic drugs will be 7%. Those figures will rise over the years, eventually reaching a total 75% discount that effectively will eliminate the gap in 2020.

Like all the other tax credits, stimulus payments and deductions I will provide more details on various government programs and encourage you to subscribe (free) via Email or RSS to get the latest updates.


Even though President Obama’s $250 Social Security rebate in 2010 (to offset the lack of a COLA increase) was quashed by Congress for now, he has been able to get a $250 payment to seniors on Medicare through the recently enacted Health care reform bill.

The $250 payment to offset the Medicare drug coverage gap – known as “doughnut hole” – a big, expensive gap in coverage that affects millions is among the first to be addressed under the new health care law and while in effect immediately, it will take a few months for the rebate to be paid. The coverage gap or doughnut hole, refers to the lack of Medicare coverage for out-of-pocket drug costs between $896.25 and $4,350.25. Medicare covers 75% of costs less than $896.25 and 95% of costs over $4,350.25. In 2011, Medicare eligible participants would also receive a 50% discount on brand name (non-generic) drugs.

Other Medicare aspects of the health care reform will take 4 or more years to implement, and includes the gradual closing of the dreaded “doughnut hole” prescription coverage gap, improved preventive care and puts a new emphasis on trying to keep seniors struggling with chronic diseases in better overall health. But it also cuts funding for popular private insurance plans offered through the Medicare Advantage program. About one-quarter of seniors have signed up for the plans, which generally offer lower out-of-pocket costs. That’s been possible because the government pays the plans about 13% more than it costs to cover seniors in traditional Medicare. As the payments are scaled back, it could trigger an exodus from Medicare Advantage.

The Medicare prescription drug program and its unpopular “doughnut hole”, would be totally eliminated by 2020. At that point, seniors will be responsible for 25% of the cost of their medications until Medicare’s catastrophic coverage kicks in, dropping their co-payments to 5%.

36 thoughts on “$250 Medicare Drug Coverage Gap Rebate for Seniors To Be Paid in 2010 Under Obama Health Care Reform

  1. I am currently on SSDI and hit the coverage gap on November 24th, 2010. One week before hitting the so called “Doughnut Hole” I called my medicare advantage plan to find out How this works since I have assigned my medicare to” Health Net Medicare Advantage plan”. They told me that once a week medicare will be notified of anyone hitting the coverage gap. They couldn’t tell me what day of the week. So lets say I hit the coverage gap on a Wed does that mean that the Friday following you notify medicare?? They said they didn’t know which day of the week it was so lets say it was the following Friday then. Well they said once they notify Medicare it would take 45 days until you either A. Received a Check or B. Direct Deposit (it would be however you currently have your normal SSDI handled). Okay so this was one week before I ran out I was told this. The day I ran out and hit the coverage gap I called the insurance company again and asked when would they be reporting it to medicare? They said they only report once a month to medicare and that NOW Medicare sends the money to them (The insurance company , The prescription part D insurance) and that then they turn around and mail you a check! So I said this is not what I was told before and explained the above that I had been told just last week. They said well I’m sorry but they mis-informed you and that the procedure had changed quite awhile ago. So I asked “What part or day of the month do you notify them?” He said I can’t answer that question I don’t know. I said well if you notify them on the 15th or the 20th of the month and I ran out on November 24th, 2010 then Medicare won’t even know about it until December 15th or 20th? rather than at the end of November! He said well we won’t even investigate anything until it has been 60 days from the day you fell into the coverage gap. So…..Now instead of November 24th and the 45 days goes as originally documented I have to wait at least 60 days and if it is not received by then…Then I can’t even have them trace it until that day? This is crazy. Plus I found out that I changed my address with them but the person who input it did not change the city and zip they only changed the street so of course everything has been either returned or mailed to the wrong address. And I can’t have them do anything until 60 days from the day the coverage gap was hit? Plus how quick is Medicare paying the insurance companies? And how long does the insurance company get to hang onto MY Money before sending it to me? This is ridiculous!!!

  2. YOU Mean I without a lot of thing to keep ins.BECAUSE “Iwas SMART enough to get gap ins. I WILL NOT GET MONEY?”” Whats wrong with this picture???????????? I did without a lot of NEEDED things to keep this ins. car repair, needed new roof, dr. vists funny huh. But congress got theirs raises I vote and I will VOTE TO GET THEM OUT.

  3. In 2009 Mr Obama said the seniors would get a check for $250.00, in place of the cola. Well were is the money, washington post said it went to people who passed away and to immates. Nice job there Mr Obama. Now again he said the same thing. Question is who in washington going to get this money, surely not us seniors. I know of three families that have not seen last years check yet. I feel it’s time to throw everyone out of washington and bring in common people who aren’t rich, and let them run the country.and get rid of all the lobbist too. Mr Obama surely is not getting my vote next time. I was alway told a man is only as good as his word. Well if the shoe fits Mr Obama wear it. Just don’t make promise that you can’t keep. we are not dumb, like you people in washington think.

  4. I have just spent over two hours trying to find out when I might receive my $250. check as I reached the “gap” at the end of June. I spoke to two people at Medicare and three people at my supplemental insurance (Part D) company. Each one had a different understasnding and/or explanation of this benefit. I have come to the conclusion that not one of these people was given any training on this new rebate, and as a result NO ONE has the right answers and that includes the politicians from top to bottom. I believe the answer may be to withhold any and all payments to the companies and politicians until such time that they are capable of doing their jobs correctly! Money (or lack thereof)seems to be the only viable way to reach these people and their feeble minds!

  5. The 50% rebate on drugs for people who hit the medicare gap won’t help where Lipitor is concerned. It’s double the price this year from last. How can the drug companies get away with this blatant price gorging? I am so disgusted with the way Senior Citizens are being treated – every years prices go up on everything but the Social Security stays the same. How tight can we keep pulling our belts? It’s a choice between medication and eating.

  6. My roomate is only 47 but disable,will he be getting this $250.00 and also has medicare part D,and his mother also has medicare and part d

  7. there is a notice on the back of the check where a person would normally endorse it.

    it says :: THIS NOTICE APPLIES ONLY TO PROVIDER. what does this mean

    can this check be cashed for cash, or put into my checking account or what ???

    please advise. thank you.

  8. Actually someone I know received a check today and it is a real check for cash, not a credit.

  9. they are all full of s%@t they planned this so if we the people would make a stand it may be diferant we should run the gov. not them run us we the people are scared of gov. LETS MAKE THAT STAND 1 for1 for all !

  10. if i go in the gap this year i will definately need 250.00 and more but why will it take forty five days to receive our money .we will really be in the hole in that length of time unless i get extra money from somewhere only God knows where i can’t pay full price for medication so where does that leave me and lots of other people on medicare drug plans all of us need more money so rich man give us some of your money Gods word says love your neighbor as yourself

  11. well the people who isnt going to get check we need our raise back. this was stated before the raise was taken.this country has to make changes fast. get someone who will do something.

  12. The thing is with this 250.00 medgap payment..its only for senoir citizens those on and over the retirement age..no one eles..seems ssi cant even get it right…they told me it was for anyone
    thats on medicare…but they get you in the end by it only gets paid if and when you reach your perscription payment gap..most are 4000 or more..and two more things I would like to address..
    if a usa citzen( with this new med bill) goes to the doctor or hospital with out insurance they can be fined..
    wth..and what about getting a rental subside? No matter if we ever get a cola…rent will increase.
    hey need to stop landlords from asking to much…then maybe they get paid without excuses..
    in 15 years a apt in indiana(northern) went from 50 a week to 100+..then they wander why we cant afford to live..and yes freeze all government pay!!!!

    1. my husband is disabled and he got his check after he reached the doughnut hole.

  13. My 88yr old father has Medicare and scan and still has to co-pay for Dr visits and all prescriptions. does he qualify for the $250 check?

  14. I understand alot of talk about the $250.00. I’m on disability, and I recieved the money last year as
    promised. This year has been really rough as everyone too. I have not seen anyone who says,”I don’t need help.” Thats what America is about. Helping one another.
    I am taking care of my aunt who is badly sick, and have heard other people who is taking care of more family members instead of nursing homes. I for 1 will not put someone in a nursing home, I rather have them here with me so I can care for them.
    A little help is better than No Help. Congress and President needs to see that everyone who lives month to month is hurting.

    PLEASE GIVE AMERICA HOPE!!!!!!!!!!!!!!!!! Thats all America needs.

  15. just read this notice on the rebate; i think it’s unfair to have to WAIT for the big donut hole in order to recieve 250.00 ! i am a resident council president representing 300 residents. now, i hav3e to break the news; thanks alot for nothing pres.

  16. Your statement “the tax free $250” is incorrect. It is not tax free if you itemize on your 1040. If you itemize your medical expenses on the 1040, you must reduce your medical deductions by $250. This will increase the amount of tax you owe. Not by much but it is definitely not tax free for those who itemize.

    1. They could if they meet the qualification criteria for each credit (see post for details).

  17. I feel we are being discriminated on this 250.00 med gap payment..
    what makes them so more important.


    1. I agree with you. I am also disabled and I got the check last year but who knows with this year. I sure could use some help. Sometimes I can’t even afford my meds and we have precription coverage.

  19. I have a private insurance because I did not thinl that I qualified for plan D.I don,t get
    a lot of money every month but due to worked I just kept my insurance with Blue Cross
    and blue shield.I had cancer and can not afford my medication half of the time.Because
    I am on so much medication and it is costing me a lot each month.Any answer would
    be appreciated. Thanks

  20. This is great for the people that fall in the Gap, I would like to have seen everyone get $ 250.00 or the COLA this year and 2011……..

    1. I am one of the few or many I really don’t know. I do not take meds.I have never had a flew shot. I have worked hard at being drug free (meds) I opted out of Medicare because the cost was too high, nearly 100.00 There is nothing in this insurance that i need to use and the things I need are not covered, such as: ligament replacement and I would like to see a dermatologist to remove some brown spots. Seniors have to be near death to get services from Medicare. So( well )seniors are being punished. and get nothing.Seniors are not morons — they have the right to decide how to spend the promised 250.This money was promised without strings attached. Earmarking a gift is not a gift. I need the money and so do others who are blessed with a strong will to stay off of medications that have questionable side effects I want some real answers to even vote again. Sincerely,Suzanne Day

  21. The real problem here, as usual, is that the $250.00 check/return/rebate, whatever you want to call it, is written in political/government gobbledy-gook so that no one can really understands it. This is probably what they want in the first place.

  22. President Obama is expected to host a tele-town meeting in Maryland to talk to seniors around the country about the Affordable Care Act and the $250 payment. Can some one ask him what is happening with the other $250 Social security payment – which many of us are still waiting for because we don’t qualify for the medicare payment

    1. i don’t understand why the senators does not want us to have 250.00 that we need so badly .they need to try for one month to live on what we on ss get .that is all it would take ‘one month they live so far above us i guess their head is swelled so big they can’t think straight any more .they only think of me my four and no more they need to open their eyes so they can see how other people have to live

  23. I am a Viet Nam Veteran and pay about $85 per month on prescription drugs. Can anyone tell me if I am elgible for the $250 rebate check. Or are Veterans not covered by this?

    1. Per the latest updats to the post, “If you have Medicare prescription drug coverage, and aren’t already getting Medicare Extra Help, Medicare will automatically send you a one-time $250 rebate check after you reach the coverage gap. The Explanation of Benefits notice, which your drug plan mails to you each month when you fill a prescription, will tell you how much you’ve spent on covered drugs and whether you’ve entered the coverage gap”

  24. Then individuals that have been elected by us Americans’ ONLY think of themselves…and if they give the POOR any more $$$ it means Tax dollars on the RICH!!!!!!!!!!!!! and, I mean RICH; which includes Congress. What about all the raises Congress gives THEMSELVES…who votes on that? THe TAX payers…NO, and they get Paid with OUR tax dollars.

    Oh, and by the way…America is ONLY for the RICH maybe you are in the NOW disapearing “Middle Class” ONe is either Super RICH…and think they above the worker bees…or so POOR one cannot even have 1.$ left at the end of the month. What about that? Congress…So, go ahead and don’t give us the $250 rebate for 2010…You find the “Chickens’ will come home to roost”

    1. I am a Senior ,Viet Nam Vet, EX -crane operator & Structural Iron Worker & Father of 4 Sons . I,m disabled & just went through 3 major operations in less then 10 months & now that $250.00 looks very GOOD ! Pull the rug out & less us fall , while the congress goes on vacation & gets raises . Ever hear about ” A Government raise freeze ” till you get enough to give us our Cost of Living ! The % indicator of cost of living is a joke ! Every time the indicator is used its after the prices go down again for 1 to 2 months then shoot up again . Yet we paid 10 months out of the year higher prices for things like ” food, gas, over counter meds, clothes, electric, car insurance ,even our cable so we can watch them tell us our rates have to go up to stay competitive ” ! Give us ” Money Not a Break !

Leave a Reply

Your email address will not be published. Required fields are marked *

Share via
Copy link