By Kimberly Lankford, Contributing Editor June 11, 2010 Medicare beneficiaries have always worried about landing in the “doughnut hole.” Within this coverage gap, they have to pay the full cost for their prescription drugs. In 2010, the Medicare Part D doughnut hole starts after your prescription-drug expenses total $2,830 for the year (including both your share and the insurer’s share of the costs). At that point, you generally have to pay for all of your drugs until total costs for the year reach $6,440, when catastrophic coverage kicks in. The health-care-reform law made several changes to the doughnut hole. Starting in 2011, drug companies will be required to provide a 50% discount on brand-name drugs in the coverage gap. And the doughnut hole will gradually shrink until Part D beneficiaries will have to pay just 25% of drug costs in the coverage gap in 2020. See What Health-Care Reform Means for Medicare Drug Coverage for more details. Sponsored Content And this year, people who fall in the coverage gap will receive a one-time $250 rebate check. The rebate is tax-free. The first batch of checks was mailed June 10. Here’s what you need to know: Who qualifies for the $250 rebate check? Advertisement To qualify, you must have reached the Medicare Part D doughnut hole. What do I need to do to get the rebate? Do I need to fill out any paperwork? You don’t need to do anything. The government will automatically send you a check when you reach the coverage gap. Beware of anyone who offers to help you submit the paperwork. Some crooks have been using the rebate as a ploy to gather your personal information, Social Security number or bank account information and steal your money or identity. If anyone asks you for this information to help you get the rebate, report the incident to Medicare (800-633-4227) and to your state attorney general. Advertisement How will I know when the real check arrives? The envelope will have the U.S. Department of Health and Human Services symbol and will say “Medicare Part D.” When will I get the check? If you have already reached the doughnut hole, you should be receiving your check soon. The first wave of rebate checks was mailed on June 10. More checks will be mailed monthly throughout the year -- you should expect to receive yours within 45 days of falling into the gap. You won’t get the check, however, if you’re receiving the low-income subsidy to help pay your Part D premiums. Advertisement How will I know if I’m close to reaching the doughnut hole? The Explanation of Benefits notice that your drug plan mails to you each month when you fill a prescription alerts you when you’ve entered the gap. Use our Doughnut Hole Calculator to help you predict when you'll reach the coverage gap. Got a question? Ask Kim at firstname.lastname@example.org.