Seniors seek help with Medicare's 'doughnut hole'

Jun 9 2009

Senior and elderly advocate groups are calling on Congress to get rid of the "doughnut hole" in Medicare's drug benefit as part of the larger efforts to reform health care, according to The Dallas Morning News.

The "doughnut hole" forces millions of Medicare beneficiaries to bear the full cost of their drugs for a period of time once they exceed $2,700. "Unless they qualify for a government subsidy or have bought extra insurance, they're on their own for the next $3,454 in prescriptions. At that point, after paying a total of $4,350 out of pocket, beneficiaries become eligible for Medicare's catastrophic coverage and are responsible for 5 percent of their bills for the rest of the year," The Dallas Morning News reports. The gap exists because Congress had only so much to spend when it created the Medicare drug program and the main challenge in correcting it is money: "Closing the gap and providing continuous coverage for all beneficiaries would cost $134 billion over 10 years, according to the Congressional Budget Office." Still, "experts say that as much as $110 billion could be raised by requiring drug manufacturers to give Medicare the same 15 percent discount they now give Medicaid, the health insurance program for low-income Americans."

"More than 3 million of the nearly 27 million older or disabled Americans who receive the Medicare drug benefit are expected to reach the coverage gap this year and pay the full cost of their prescriptions, says the AARP Public Policy Institute." AARP also "projects that the size of the gap will almost double, from $3,454 to more than $6,000, by 2016."

Beneficiaries with chronic or serious illnesses often experience severe hardship and "sixteen percent of beneficiaries who hit the gap reduce their medication or stop taking their drugs altogether, says the Kaiser Family Foundation (KHN is a program of the Kaiser Family Foundation). Advocates say that "eliminating the doughnut hole would probably reap savings for Medicare over the long run, since it would keep seniors on their prescriptions and out of the hospital."

If completely closing the hole isn't possible, advocates recommend at least narrowing it. That could be done by allowing more Medicare drug beneficiaries to qualify for the government's low-income subsidy or "mandating the coverage of generic drugs through the gap and offsetting the added expense to the government by charging larger co-payments before consumers reach the doughnut hole" (6/8, Moos).

Meanwhile, WSPA Channel 7, a Media General station, reports that South Carolina lawmakers increased the amount the state will pay for its seniors who fall in the Medicare Part D doughnut hole from 10 percent up to 30 percent starting July 1. Jeff Stensland, spokesman for the South Carolina Department of Health and Human Services, says "about 25,000 South Carolinians qualify for the program but he doesn't know how many actually reach the "donut hole" and receive assistance" (Kittle, 6/8).