By Michael D. Sorkin
Saint Louis Post-Dispatch
Wednesday 01 November 2006
It's called the "doughnut hole," and it's the most controversial piece of Part D, Medicare's prescription drug program.
The hole requires seniors trapped inside it to pay for drug insurance and, at the same time, pay the entire cost of the drugs they buy.
On Wednesday, a study by a health consumer watchdog group said the cost to insure yourself against the hole next year will go up 111 percent in Missouri and 72 percent in Illinois.
Nationwide, the average cost will increase 87 percent in 2007, says Families USA, a universal health care advocate whose study is based on records the insurers filed with Medicare.
Under Part D, coverage applies to the first $2,250 spent on prescriptions and picks up again after $5,100. The $2,850 in between is not covered, and known as the doughnut hole.
Next year, the gap will grow to $3,051. By 2013, it is expected to grow to $5,066.
The consumer study says the hole makes no sense medically, and financially penalizes those who are sicker and need more prescription drugs.
Mark Adams and his wife signed up for Part D in May and hit the hole the next month.
For six weeks, they put all of her drug costs on their credit card. They had to dip into their savings and today say they are still paying interest on more than $700 of those leftover costs.
Once they're through the hole, Part D will start paying again - until next year, when they must start saving up to pay for a new hole.
Adams, a self-employed building inspector and onetime insurance agent near Neosho, in southwest Missouri, has strong words for the members of Congress and the industry lobbyists who devised Part D.
"It's not a good plan in the long run," Adams said. "It's costing everybody more than it should, just to benefit the pharmaceutical industry."
Medicare officials say 38.2 million people are receiving prescription drug coverage, which they say is better than many people had in the past.
Medicare spokesman Aaron Hase said the Families USA report presents a "distorted and incomplete picture," but his statement did not take issue with the group's financial findings.
Hase said the group's study does not take into account additional savings possible through the use of lower-cost generic drugs.
Families USA says 18 of the top 25 drugs that seniors use are not available as generics.
"As a result, drug plans that provide coverage through the doughnut hole for generic drugs only are virtually meaningless for seniors who need the most frequently prescribed medications," the study says.
The study found that only a handful of insurance plans reimburse consumers for drugs purchased during their time in the hole. Of 2,182 plans nationally, the study found that only 55 offer meaningful doughnut hole coverage. Next year, the number of plans nationwide will increase to 2,844, but just 38 will offer meaningful doughnut hole coverage.
In Missouri, the lowest monthly premium for a plan with doughnut hole coverage is $56.43 this year. That will increase next year to $119.50.
In Illinois, the lowest monthly premium this year is $61.51; next year, it increases to $106. The study said rates vary substantially state to state.
"The premium increases are enormous," said Ron Pollack, Families USA executive director, saying the burden falls heaviest upon those who need more prescription drugs.
A common concern among seniors is where to turn for advice.
Norma Collins, a top official at AARP in Missouri, spent six months educating consumers about Part D. So her aunt knew who to ask for help.
Collins says she analyzed every plan to find the one that would keep her 73-year-old aunt out of the hole the longest.
Even so, her aunt hit the hole in July. She found out when she went to her neighborhood drugstore and was told that prescriptions now will cost her about twice as much.
Collins said she apologized to her aunt. "She'll probably be in the doughnut hole the rest of the year," Collins added.
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