Tuesday, September 27, 2011

Doughnut Hole Inhibits Access to Prescription Drugs

People who reach the Medicare prescription drug coverage gap, also known as the doughnut hole, reduce their drug intake or stop taking their drugs altogether as a result, according to a new report released by the Kaiser Family Foundation this month. The report, titled “Understanding the Effects of the Medicare Part D Coverage Gap in 2008 and 2009,”analyzed drug claims data to examine the affect of the coverage gap on Medicare beneficiaries. According to the report, over 3 million people with Medicare reached the coverage gap in 2009, and in general beneficiaries suffering from certain conditions, including breast cancer and Alzheimer’s disease, are more likely to reach it. In addition, those who reach the gap in one year are more likely to reach the coverage gap in following years, and they generally face highly fluctuating drug costs throughout the year.

Before the passage of the Affordable Care Act (the ACA), people with Medicare who reached the coverage gap were responsible for paying the full costs of their prescription drugs out of pocket. However, the ACA gradually phases out the coverage gap through 2020, when beneficiaries’ share of drug costs will reach a standard level of 25 percent. Medicare beneficiaries who reach the coverage gap in 2012 will receive a 50 percent discount on brand-name drugs and a 14 percent discount on generic drugs, an increase from the 7 percent discount on generic drugs in 2011.

The Medicare Rights Center has created a new doughnut hole fact sheet to reflect changes in 2012. The coverage gap begins in 2012 when beneficiaries reach $2,930 in total drug costs, which includes both what the beneficiary and plan pays, for drugs covered by their plan. The coverage gap ends when total drugs costs reach $6,657.50. The amount the beneficiary pays for all drugs and the amount covered by the 50 percent discount on brand-name drugs count toward the total drug costs needed to get out of the doughnut hole and into catastrophic coverage. The amount covered by the 14 percent discount on generic drugs does not count toward getting out of the doughnut hole.

Read Kaiser Family Foundation’s report “Understanding the Effects of the Medicare Part D Coverage Gap in 2008 and 2009.”

Read Medicare Rights Center’s fact sheet, “Health Reform and Medicare: The Doughnut Hole in 2012.”

Read Medicare Rights Center’s fact sheet, “Health Reform and Medicare: Closing the Doughnut Hole.”

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