Bills Soar As Many Hit Gap in Drug Plan
Sunday, July 30, 2006
The calls are starting to come in from shocked or angry seniors. They have just learned that their Medicare drug plans are maxing out on early coverage and that they must now spend $2,850 from their own pockets before coverage will resume.
"I can't pay for my medications," one man told Howard Houghton of the Fairfax Area Agency on Aging the other day. "What do I do?"
Over the next five months, several million Americans with high medicine costs could find themselves in a similar bind. The gap in insurance, popularly called the doughnut hole, is an unusual provision in most of the private plans offered in Medicare's new Part D prescription drug program. Advocates for the elderly say it is misunderstood and problematic.
"There's nothing sweet about the doughnut hole," said Deene Beebe, spokeswoman for the New York-based Medicare Rights Center.
The program was designed to give all participants a certain level of insurance and to protect elderly and disabled recipients with chronic or catastrophic illnesses from huge prescription expenses. To afford those two goals, Part D's designers built in an annual period during which individuals have to pay for medicines themselves.
Under a standard plan this first year, Medicare handles 75 percent of drug costs after a deductible until the bill reaches $2,250. It does not kick in again until those costs total $5,100. After that, prescriptions are almost completely paid for. The very poor can get special subsidies.
Officials consider the formulation sufficient for the vast majority of recipients and a tremendous boon to those with the largest bills.
"That's a peace of mind . . . they never had before," said Mark McClellan, administrator of the federal Centers for Medicare and Medicaid Services.
As of mid-June, federal officials said, 22.5 million people were enrolled in the program, about half of those eligible. The agency's estimates of how many will hit the $2,250 threshold are below projections from the Congressional Budget Office and others, partly because of lower-than-expected monthly premiums and greater use of generic drugs.
Even recipients who fall into the gap will benefit overall, McClellan emphasized. "We've made a lot of progress this year," he said.
Advocacy groups and some independent health analysts have warned of serious health consequences for older and disabled Americans living on low or moderate fixed incomes. Their resources, though minimal, often are too much to qualify for extra help. They face difficult choices, advocates fear: buy medicines or food and other necessities?
"It's a tough thing," said Houghton, who works with seniors as Fairfax County's coordinator of the Virginia Insurance Counseling and Assistance Program. The distressed retiree who appealed to him is 66 years old and takes five generic drugs and three "very expensive" brand-name pills.