From Senator Reid's staff, information on Donut Hole under new healthcare reform bill. Please don't let Sarah Palin and the Tea Party and GOP destroy Senator Reid's exceptionally good career as the Senator from Nevada. If you do, it will be the start of a revolution that could destroy freedom (my opinion).
OVERVIEW
The much discussed ‘donut hole’ in the Medicare prescription drug program causes a significant amount of confusion and distress for seniors. When the Medicare prescription drug program (‘Part D’) was created in 2003, Congressional Republicans made a key decision to reduce the cost of the bill. Seniors are required to pay 100 percent of the cost of their prescription drugs, once they reach the initial coverage limit, and until they reach the point at which their spending hits what is known as the ‘catastrophic amount.’ This gap is referred to as the donut hole. The effect of this gap in coverage has been catastrophic for many seniors. According to one estimate, once seniors enter the donut hole, 15 percent stop taking their medication, and 57 percent of them remained off their medication. The health care reform law fixes this problem, providing seniors a $250 rebate check when they hit the donut hole this year, and starting in 2011, providing a 50 percent discount on brand-name drugs purchased while seniors are in the donut hole in that year, phasing to close the donut hole completely by 2020.
WHAT IS THE ‘DONUT HOLE’?
• Seniors are required to pay 100 percent of the cost of their prescription drugs once they reach the initial coverage limit, and until they reach the point at which their spending hits the catastrophic limit.[1]
• For 2010 the Part D benefit coverage limit is $2,830. After which beneficiaries are expected to pay 100 percent of their drug costs until their spending hits $6,440, a coverage gap of $3,610.[2]
• Without health reform, the coverage gap could have exceeded $6,000 by 2019.[3]
• Over 31 percent of beneficiaries hit the initial coverage limit of their drug plans in 2007, only one year after the program started.[4]
CONSEQUENCES, PRICE INCREASES AND PROFITS
• 15 percent of seniors entering the donut hole stop taking their medications. Five percent switch to an alternative drug in the same class.[5]
• 57 percent of beneficiaries that stopped taking their medications in the donut hole did not resume taking their prescriptions once exiting. Only 36 percent resumed taking their medications.[6]
• Overall drug prices increased by over 8 percent between 2007 and 2008. Prices rose by over 10 percent between 2008 and 2009. According to Express Scripts Inc., one of the country's largest pharmacy-benefits managers, drug prices rose by more than 10 to 15 percent between the first quarter of 2008 and first quarter of 2009.[7]
• Pharmaceuticals are the third-most profitable industry in the United States, with profits at 19 percent of revenues.[8]
• The 2008 gains of the top 21 drugmakers amounted to $51.5 billion.[9]
IMPORTANCE OF HEALTH CARE REFORM
• In 2020 the Health Reform law completely closes the donut hole.[10]
• The Health Reform law provides a $250 rebate check for Medicare beneficiaries who hit the donut hole in 2010.[11]
• Beginning in 2011, the law institutes a 50 percent discount on brand-name drugs in the donut hole.[12]
• Over 70 percent of respondents to a recent survey said it was either extremely important or very important for a health care reform law to close the donut hole.[13]
NUMBER OF PART D BENEFICIARIES HEALTH REFORM PROTECTS FROM THE DONUT HOLE
STATE NUMBER OF BENEFICIARIES[14]
Alabama 143,000
Alaska 10,600
Arizona 151,000
Arkansas 89,800
California 794,000
Colorado 102,000
Connecticut 97,100
Delaware 24,800
District of Columbia 13,300
Florida 565,000
Georgia 203,000
Hawaii 34,300
Idaho 37,700
Illinois 314,000
Indiana 170,000
Iowa 89,700
Kansas 73,900
Kentucky 129,000
Louisiana 116,000
Maine 44,800
Maryland 132,000
Massachusetts 180,000
Michigan 279,000
Minnesota 133,000
Mississippi 84,600
Missouri 171,000
Montana 28,400
Nebraska 48,000
Nevada 58,200
New Hampshire 36,200
New Jersey 227,000
New Mexico 51,900
New York 511,000
North Carolina 247,000
North Dakota 18,800
Ohio 325,000
Oklahoma 102,000
Oregon 103,000
Pennsylvania 393,000
Rhode Island 31,500
South Carolina 127,000
South Dakota 23,300
Tennessee 177,000
Texas 493,000
Utah 46,500
Vermont 18,600
Virginia 190,000
Washington 159,000
West Virginia 66,000
Wisconsin 155,000
Wyoming 13,500
[1] Kaiser Family Foundation, 2010 Primer
[2] Kaiser Family Foundation, 2010 Primer
[3] Kaiser Family Foundation, 11/2009
[4] CMS: Medicare Releases Part D Data For 2006 And 2007 At Medicare Prescription Drug Benefit Symposium
[5] Kaiser Family Foundation, 8/2008
[6] Kaiser Family Foundation, 8/2008
[7] Testimony by Gerard Anderson before Senate Special Aging Committee, 3/17/10; Wall Street Journal, 4/15/09
[8] Boston Globe, 11/21/09
[9] Boston Globe, 11/21/09
[10] HR 3590, signed into law 3/23/10
[11] HR 3590, signed into law 3/23/10
[12] HR 3590, signed into law 3/23/10
[13] Kaiser Family Foundation, 2/2010
[14]HealthReform.gov, accessed 3/23/10
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