Who Ate The Donut Hole?

Millions of Americans are just now entering the “donut hole��? of Plan D. This Medicare prescription drug benefit has been a hot political potato for years.
Faced with growing anger from senior citizens about the high cost of medicine, Congress fought about this legislation for years. Eventually in 2003 our legislators passed the Medicare Prescription Drug Improvement and Modernization Act and President Bush signed it into law on December 8th, 2003. There was a great deal of smiling and hand shaking and congratulating. Finally, the monkey was off the back of Congress.
At the time he signed this legislation President Bush offered that: “Our nation has the best health care system in the world. And we want our seniors to share in the benefits of that system. Our nation has made a promise, a solemn promise to America’s seniors. We have pledged to help our citizens find affordable medical care in the later years of life… First and foremost, this new law will provide Medicare coverage for prescription drugs… Medicare will pay for prescription drugs, so that fewer seniors will get sick in the first place… Drug coverage under Medicare will allow seniors to replace more expensive surgeries and hospitalizations with less expensive prescription medicine. And even more important, drug coverage under Medicare will save our seniors from a lot of worry.��?
A lot of senior citizens breathed a sigh of relief when they heard about prescription drug coverage at long last. What they did not know was that a lot of arm wrestling and rule bending went on to make it happen. According to Louise M. Slaughter, M.P.H and member of the House of Representatives, “The political process used to pass Part D was the worst abuse of the legislative process I have ever seen during my 20 years in Congress.��? For the full account see her “perspective��? in the New England Journal of Medicine see this URL:
http://content.nejm.org/cgi/content/full/354/22/2314
Initially a lot of seniors were confused by all the various plans offered by insurance companies. But once they signed up and discovered that many drug bills were in fact 75 percent lower, there was genuine delight. There was just one problem.
Most seniors did not truly understand the intricacies of Part D. What they did not realize is that once their total medication outlay (including $1500 kicked in by Uncle Sam) reached $2250, they would be in the dastardly donut hole. From that point until the total drug bill reaches $5100, older people are responsible for 100 percent of their medication costs including their monthly insurance premium.
What that means in practice is that someone could go to the drugstore and pay $100 to $200 for five or six prescriptions one month and discover that the next month the bill has gone up to $400 or $500 for the same medicines. Millions are now entering this donut hole and will have to pay full freight until the end of the year when it all starts over again.
Not surprisingly, many pharmaceutical companies are smiling all the way to the bank. According to Wall Street analysts, drug sales are up because of increased drug dispensing. And pharmaceutical price increases have continued to outstrip inflation. You have probably heard that the new legislation means that pharmaceutical companies do not have to negotiate prices the way they do with the Veterans Administration.
The bottom line seems to be that the donut hole is hurting millions of seniors but many drug companies are licking their chops. The next few months are likely to produce some unexpectedly high prescription bills for a lot of people who thought Part D was going to end their worries.