Medicare’s Doughnut Hole: a Coverage Gap that Needs to be Fixed

Seniors have been confronting the confusing and inaccurate enrollment information surrounding the Medicare prescription drug program (PDP) for months now.  A congressional report from the House Ways and Means Committee recently confirmed that many seniors and disabled workers are in for yet another unpleasant surprise.

Nationally, the report shows that 88 percent of PDP enrollees who do not receive extra help are in plans with substantial coverage gaps.  The report also found that an alarming 95 percent of enrollees in Maine are in drug plans that contain the gaps in coverage. 

As the report outlines, in order to fit within an arbitrarily-determined budget allocation, the Administration and congressional leaders created a standard benefit structure under which coverage drops away as needs increase.  Coverage eventually resumes after beneficiaries meet a spending target – creating the gap in coverage that is often referred to as the “doughnut hole.”  Unfortunately, the target is set at a level beyond what most beneficiaries will spend.  This ends up forcing people who are subject to the gap to lose coverage even though they are still required to pay their premiums to the insurance companies. 

The congressional report goes on to explain what the gap means in terms of expenses to seniors.  In 2006, once beneficiaries have used $2,250 worth of medications, coverage does not resume until they have used a total of $5,100 in covered drugs.  This results in a gap of coverage equal to $2,850.  Because the legislation that created the drug benefit indexed these numbers, the Congressional Budget Office concluded that the gaps will more than double from $2,850 to $6,730 by 2016.

This coverage gap affects many Mainers – almost 70,000 seniors and disabled workers in our state.  What is frustrating is that Congress is doing nothing about it. 

A recent article that appeared in the Washington Post described how a number of people from all walks of life and areas of the country have been affected by the coverage gap.  For example, Clarice Wansley, a retired county administrator who lives in Mississippi fell into the doughnut hole in June.  Her drug bills went from $184 a month to $387 for the eight medications she takes for cancer, heart trouble, seizures and other ailments.  She paid on her own for the past few months, but recently her doctor told her she needed yet another drug, one that costs $239 a month. Now she doesn't know what to do.

“I'm not destitute, but I can't pay that and buy gasoline and food and pay the mortgage,” Wansley said. “I'm scrambling around trying to find help.”

Stories like these are becoming increasingly more common.  With costs for things like fuel at high levels, our seniors can’t afford the massive prescription drug bills that will be forced upon them due to the doughnut hole. 

People deserve action on this issue.  We need to fix the new prescription drug program now so that more seniors don’t fall victim to gaps in coverage.  My colleagues and I are pushing a plan that would make the prescription drug benefit simple, affordable, and reliable for senior citizens and people with disabilities. 

Our plan would require Medicare to use its bargaining power to negotiate lower drug prices, something that I have been pushing since first coming to Congress.  The savings realized through negotiations would lower the costs of the program and be used to fill the doughnut hole.  Our plan would also waive the late enrollment penalty for millions of beneficiaries who are now locked out of coverage until 2007 and simplify the program by creating a Medicare-sponsored option.

I will continue to work hard to enact these changes.  In the meantime, however, seniors that experience a gap in coverage may be able to apply for prescription-assistance programs run by some states and pharmaceutical companies.   The following numbers and websites will be able to provide more information:

• Medicare – (800) 633-4227
• Maine Office of Elder Services – (800) 262-2232, www.maine.gov/dhhs/beas/
• If your income is limited, you may qualify for extra help. Call Social Security at (800) 772-1213 or visit www.socialsecurity.gov
• Some drug manufacturers offer free or low-cost drugs to qualified Medicare beneficiaries. Call the Partnership for Prescription Assistance at (888) 477-2669 or visit www.pparx.org

 

 

10/2/2006 11:45:06 AM

 
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