By Susan Levine
Washington Post Staff Writer
Sunday, July 30, 2006; C01
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.
"He doesn't have a whole lot of recourse," Houghton said.
According to a report by the Campaign for America's Future, a Washington-based advocacy organization, seniors enrolled in the program at the start of the year will, on average, reach the doughnut hole Sept. 22. As the calls to agencies on aging and senior centers attest, many already have.
Retired teacher Elise Cain walked into her Silver Spring pharmacy last week for a pill she takes for diabetes, one of her dozen daily medicines. The 77-year-old woman had paid $20 in June. Her charge now is $175.24.
"I nearly passed out," Cain said.
Although the Medicare handbook clearly describes the coverage break, critics say most Medicare recipients, bombarded with advertising from private prescription plans, focused on deductibles and premiums and the drugs included.
"There was a lot of emphasis on signing up seniors. It was a crusade almost," said Stuart Guterman, a Medicare expert with the nonpartisan Commonwealth Fund. He doubts that many companies highlighted the doughnut hole in their marketing push. "That's not a selling point," he said.
Columbia resident Mary Ann Anderson, 81, was caught by surprise even though she had carefully reviewed the plans. She knew she had to choose wisely given the long list of medications she is taking after having double bypass surgery in December.
"It was a huge success," she said of the operation. "But not having the drugs could kill me."
This month, Anderson went to the store to pick up three refills. With her coverage, the bill had been about $125 a month. Suddenly, it had more than doubled.
"You hit the limit," the pharmacist told her.
"What do you mean?" she asked, bewildered.
She quickly learned. She also learned that the $14,952 she nets from Social Security annually made her ineligible for many assistance programs, including those offered by pharmaceutical companies. She spent five days on the phone trying to find alternatives, taking detailed notes of each conversation. She contacted elected officials, federal and state, and Howard County's Office on Aging. She asked her cardiologist for samples.
Anderson is managing for the moment, thanks in part to two drug vouchers her doctor supplied and a discount card she obtained through the county. Yet she worries. Unless she can switch to a plan without a gap -- and afford its higher premiums -- she'll face the same math all over again Jan. 1.
"I'm just one of many," she said.
Exactly how many remains a contentious question. Before the program's start, the Congressional Budget Office and the Kaiser Family Foundation both projected that about 7 million recipients would be affected this year.
Then last month, a report for the national Health Leadership Council, a coalition of health care executives, pegged the number at 3.4 million. This month the Campaign for America's Future report put the estimate back at 7 million.
Democrats on Capitol Hill have called for change. One proposal would have Medicare, not the drug plans, negotiate directly with the pharmaceutical companies; supporters say the savings could help eliminate the gap. Another measure, introduced by Sen. Barbara A. Mikulski (D-Md.) and three colleagues, would waive the premium for any month when a senior lacks coverage.
Tave Kaufman, 74, of Bethesda calculates that he's better off regardless. Although he and his wife quickly spent their way past the first threshold, their total cost should be less by year's end than in 2005. "It better be," he said, "or else we took the wrong plan."
But his equanimity is being tested. With a brother, he's paying for the prescriptions of his 88-year-old aunt. Her priciest medication runs $450 a month.
Kaufman can only laugh. "You're looking at a trio of doughnut-holers," he said.