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About That Donut Hole

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February 12, 2011 by wcobserver

The Medicare Prescription Drug program (Medicare Part D) has now been on the road for 5 years and, in the view of some, needs fixing.  Since some folks in government are really good at “fixin’ what’s not broke,” the new Health Care Reform undertakes to deal with the most controversial part of it; namely, the notorious “doughnut hole.”

Most of you senior citizens know what I’m talking about, especially if you have been blessed with a Part D Rx card.   And I definitely consider the Part D benefit as a blessing.   I could show you people in West Fork who couldn’t afford their prescriptions before the program.  Now they can.  However, the design is somewhat confusing (to put it mildly).   It looks like a Zebra designed by a committee.

The original idea was for a catastrophic plan with high deductible so that people spending more than, say $300 monthly would get some help with the high cost of their medicines.  But some in Congress thought that unfair.  In their view, the program should have a more immediate benefit for a larger number of people.  Think of that as “sugar-coating” the pill.   So, a low threshold benefit (Level I) was inserted in the law, and a gap (Level II) was left in the middle.   Not enough money to cover everything, you see.  When was there ever?

Here in the fifth year of the program, the benefits of Level I are exhausted after $2,850 worth of prescription costs.   Then, you’re in the gap (doughnut hole).   While you were enjoying Level I, you only paid a relatively small part of the cost.    Typical co-pays are $5-$7 for generics and $35-$40 for preferred brands.    Many plans also have a deductible at the beginning of the year.   When you hit the gap, you pay all costs until your out-of-pocket costs for the year totals $4,550.   Beyond that you have Level III catastrophic coverage, which is designed to cover 95% of costs for the remainder of the year.  The plan described currently costs a premium of only about $25-$30 monthly.   That’s not enough to pay its way and Part D is, therefore, heavily subsidized by the taxpayers.

You can look at it as a glass half full, or a glass half empty.  By late summer a goodly number of us have reached the gap.  We got the dough for Level I, so now we get to eat the doughnut hole before we get anymore dough.   Now, we senior citizens know how to complain loudly to our Congressman.  As a group, we tend to think whatever the government is doing for us is not enough.   We were pretty suspicious about what the Health CarevReform Bill was doing to our Medicare.  So to placate us, Congress threw us a bone; the doughnut hole would be closed… gradually of course.  We are to get a $250 benefit this year (for those who reach the gap), and between now and 2018 they will patch the rest of the hole.  We also get a half-price deal on brand drugs purchased during the gap.

Some of us more self-reliant types thought the hole didn’t need patching.  After all, there are rumblings about how much money they’re going to cut out of Medicare Funding.   Why patch one part of the program and weaken the rest, you ask?   Politics of course!

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1 comment »

  1. eLwood says:

    The do-nut hole primarily cuts out paying for chemotherapy. Plain and simple. The plan’s major failure: no drug price negotiation with Big Pharma. No other nation allows such a rip-off practice, except maybe Somalia.

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