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|Millions Will Soon Be in the Prescription-Drug-Coverage “Doughnut Hole”|
|News/Features - Health|
|Tuesday, 22 August 2006 22:32|
"Part D" is a Medicare prescription-drug benefit that began this year to save many senior citizens thousands of dollars, but millions of people will soon enter the "doughnut hole" in which they get no coverage.
At an Iowa Citizen Action Network press conference concerning Part D earlier this summer, retired Davenport senior and Part D activist Jim Hughes said, "This is a hoax, this health-care industry" about the gap in coverage between $2,250 and $5,100 where seniors and disabled people pay for 100 percent of their drug costs. This gap is referred to as the "doughnut hole."
Medicare Part D - a component of the 2003 Medicare Modernization Act (MMA) - provides an outpatient prescription-drug benefit for seniors and people with disabilities. Participants enroll in private plans, which cover different drugs and have different premiums.
Part D initially provides coverage of drug costs between $250 and $2,250. Seniors who reach $2,250 in drug spending are then responsible for the next $2,850 in prescription costs. At that point - $5,100 in drug spending - "catastrophic coverage" kicks in. People under Part D coverage pay premiums of roughly $35 a month.
Medicare Part D went into effect January 1, 2006. On July 28, the Iowa Citizen Action Network (ICAN) released a report predicting that nearly 7 million seniors nationwide will have reached the "doughnut hole" by September 22 - which the organization is calling "doughnut hole day." The organization complains that seniors in the coverage gap are paying premiums for a service they aren't benefiting from.
Because of increasing drug costs, "doughnut hole day" will actually come sooner each year, and the "doughnut hole" will grow larger each year, as well.
According to the Institute for America's Future, "the $250 [initial] deductible would grow to $275 in 2007, $300 in 2008, and so forth. ... Reaching the catastrophic threshold in 2006 requires $5,100 in total drug spending, but this rises to $5,596 in 2007, and $6,158 in 2008."
When asked about the number of seniors now seeking help because of the doughnut hole, Kris Gross - director of the Senior Health Insurance Information Organization - said: "We haven't had an outpouring of people yet. ... Many of the people that enrolled in Part D knew there would be a doughnut hole, and despite this, they have been able to save some money. I think one of the things to remember is that many people hitting the doughnut hole had no coverage previously."
According to Gross, one step seniors can take to avoid the doughnut hole - or save money once they've reached it- is to ask physicians about less costly options such as generic drugs.
"There are many people in Iowa who are eligible for extra drug coverage help through Social Security who haven't applied yet," Gross added. "I would encourage concerned seniors to apply if they are eligible."
Beyond the doughnut hole, Part D has also been faulted for being confusing to consumers, with dozens of different coverage plans. According to the Institute for America's Future, "to understand the current Part D drug program requires a level of health literacy that few individuals possess."
According to a General Accounting Office probe conducted during the period leading up to the enrollment deadline, "when people got through to the government's paid customer-service representatives, one-third of all callers received inaccurate, incomplete, and inappropriate responses to basic questions."
Medicare Part D also has provisions that critics claim are harmful to the people who are covered. According to The Hill, a newspaper for and about the U.S. Congress, the legislation "included language expressly forbidding the secretary of health and human services (HHS) from negotiating with drug companies to reduce the price of pharmaceuticals for 43 million Medicare beneficiaries."
The Institute for America's Future also noted that Part D provisions "force seniors to choose among private plans ... allowing these private plans to change their prices and drugs covered at any time, while American seniors and disabled people are not allowed to change their enrollment until the next open season."
For people in the doughnut hole who don't have supplementary drug coverage, rising drug prices make it difficult to set aside an appropriate amount of money. "Costs for drugs can fluctuate by 30 percent monthly, and that is quite a jump," Hughes said.
According to Hughes, he and his wife knew that Part D would be a problem for them, so he spent extra money on a premium plan with doughnut-hole coverage.
But that hasn't solved all his problems. "Now I find that many of the drugs we need are not covered, and we are stuck paying the expensive premium, too," he said.
In order to get out of the doughnut hole, an individual needs to cross the catastrophic-coverage threshold before each year ends and the clock resets. That means that many people will deal with the doughnut-hole problem every year.
"If people want to get rid of this, they need to contact their elected representatives, and tell them that the big coverage gap and prescription drug coverage is unacceptable," said Charlie Wishman of the Iowa Citizen Action Network. "If the government was only able to negotiate prices, economists say that that would actually fill the gap and provide savings as well."
Eliminating the doughnut hole might be wishful thinking. As the AARP has noted, "The federal government isn't likely to fund billions of dollars to eliminate the gap. But popular demand for continuous coverage might persuade more of the private Part D plans to offer it as an option in future years."
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