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Monday, June 7, 2010

A not-so-delicious doughnut hole

Erin Kelly

Staff Writer

The words “doughnut hole” may summon thoughts of a delicious treat to someone under the age of 10, but for people with Medicare those same words represent something scary.

But how can doughnut holes be scary? In our health care system, when seniors and people with disabilities sign up for prescription drug benefits through Medicare Part D, there is a coverage gap that often results in elderly and disabled Americans paying way more than they can afford for prescription drugs. We call this the “doughnut hole.”

Here’s how it works each year: Plans vary, but in general, a beneficiary pays a deductible and then is responsible for 25 percent of his or her drug costs, while the plan covers 75 percent. The beneficiary pays 25 percent until his or her total drug costs reach $2,830. Once the costs have reached that limit, the beneficiary has to pay the full price for drugs completely out of pocket until the total costs hit $6,440. And this is on top of the monthly premium.

Extra subsidies are available for people with very low incomes and limited financial assets. But for the 3.4 million beneficiaries who fall into the doughnut hole, and especially those with fixed incomes, every dollar matters: The extra money they have to shell out adds up to a big chunk of change and an even bigger financial headache for these folks. Not to mention that the people who fall into the doughnut hole are the people who need a lot of prescription drugs, which means they’re usually sicker and need the help the most.

But thanks to health reform, people who fall into the doughnut hole will finally get the help they’ve been waiting for.

Starting on June 10, the federal government will start mailing $250 checks to those who are already in the doughnut hole. Beneficiaries who fall into the doughnut hole later will receive their check then.

These checks are just a first step in correcting a problem that has affected vulnerable seniors and people with disabilities for years. Starting next year, they will receive discounts on drugs they purchase while in the doughnut hole. These discounts will grow each year until the doughnut hole is closed completely by 2020.

Medicare beneficiaries receiving help to pay for their prescription drugs so they don’t have to worry about going without necessary medicine? We’d say that’s pretty much the opposite of a “death panel.”