AARP State President Discusses Closing the Medicare Dougnut Hole

AARP has outlined six key points that it believes must be part of any health reform legislation. In addition to guaranteeing access to affordable coverage for Americans 50 to 64, lowering drug costs through generic biologics, reducing costly hospital readmissions through a Medicare Follow Up Care benefit, developing a better long-term care system and helping low income Americans, AARP is focused on closing a gap in Medicaid Part D prescription drug coverage—commonly known as “the doughnut hole.”

What exactly is the doughnut hole?

Under Medicare Part D, enrollees pay copayments or coinsurance until the total drug cost (what both the enrollee and the plan have paid) reach $2,700 for the year. After that point the enrollee is responsible for 100% of drug costs until $4,350 has been paid out of pocked on drugs (excluding premiums) since the beginning of the year. This universally nicknamed “the doughnut hole.”

How is it currently affecting Oklahomans?

In 2007, 27% of Oklahomans in Medicare fell into the “doughnut hole,” which means, although they still have to pay their Part D premium, they are responsible for the entire cost of their medications. As a result, nearly 20% of those who get their drug coverage through Medicare, delayed or did not fill prescriptions because of cost.

The coverage gap is expected to widen substantially in coming years, with potentially significant impact on the health and financial security of many beneficiaries. In 2009, the size of the doughnut hole stands at $3,454. By 2016, it is projected to almost double, to more than $6,000.

What can be done to fix the problem?

We have been working for years to fix a program we fought decades to create – the Medicare prescription drug program. We understand that help this big doesn’t often happen overnight, so we’re working on several fronts.

We are working with Congressional leaders to pass legislation that would close the Part D “doughnut hole” gradually over the long-term. In the medium term, we endorsed an agreement reached by Senate Finance Committee Chairman Max Baucus and drug makers to provide a 50% discount off the price of brand name drugs to people who are in the doughnut hole—a program that would start in July 2010.

And for those who are, right now, struggling to avoid or get through the doughnut hole, we’re launching a great new on-line calculator that can help determine when and if they’ll fall into the gap, provide alternatives to avoid it, and prepare them for talking with their doctors about making safe drug switches—all in less than 15 minutes. 

For more information on the six key priorities promoted by AARP, visit www.healthactionnow.org.