Medicare Donut Hole in Connecticut
Medicare
The New Britain Herald
Tia Albright
Boston University Washington News Service
Sept. 26, 2006
WASHINGTON, Sept. 26 – In Connecticut as many as 90 percent of residents enrolled in Medicare Part D drug plans are at risk of falling into the “doughnut hole,” a gap in their prescription drug coverage, according to a report last week by Democrats on the House Ways and Means Committee.
“We’re talking about millions of seniors and disabled Americans, their families and their children are watching a deal they thought they were going to get and they’re not because they’re falling into this doughnut hole,” Brad Woodhouse said during a conference call organized to publicize the report. Woodhouse is communications director for Americans United for Change, a group that advocates eliminating the gap.
Medicare Part D includes dozens of drug insurance plans. Plans with lower premiums usually include the gap in coverage but some plans with higher premiums do not. Under plans with the gap, insurance each year pays 75 percent of prescription drug costs after a one-time deductible until the total cost of drugs reaches $2,250. After that the beneficiary falls into what has been nicknamed the doughnut hole and is responsible for 100 percent of the drug costs until the total cost reaches $5,100. After that the plan will cover 95 percent of the costs.
“Millions of seniors and disabled Americans are going to be devastated by the Medicare Part D doughnut hole,” Woodhouse said.
Beneficiaries are still required to pay their monthly premium even if they are in the gap.
Programs that offer full coverage have premiums that cost, on average, $40 more a month, so many low-income families choose a plan with a gap to save money. The report estimates that 88 percent of participants, or 7 million people nationwide, will fall into the gap.
“If Medicare, as one entity, was allowed to negotiate directly with drug companies you could save potentially $50 billion in the program because Medicare negotiating for all beneficiaries would have much greater bargaining power with the drug companies,” said Democratic Connecticut State Sen. Christopher Murphy, who is running against Republican Rep. Nancy Johnson.
Johnson said that filling the doughnut hole would cost American taxpayers $450 billion, with seniors and disabled beneficiaries paying 25 percent higher premiums. “They have to ask themselves whether your generation can bear the cost, because 75 percent of the cost is paid by young people,” Johnson said.
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