Closing the Gap: Groups Unite to Fill Medicare Doughnut Hole-July 2009
Three million of the nearly 27 million Americans receiving benefits under the Medicare Part D prescription drug program are expected to fall into the coverage gap known as the “doughnut hole” this year. Stakeholders from many corners would like to use the current health reform negotiations to plug that hole, among them, the Pharmaceutical Research and Manufacturers of America (PhRMA), which has pledged $80 billion to help seniors caught in the gap.
The announcement was made at a White House press conference late last month, held in conjunction with the American Association of Retired Persons (AARP). Under the proposed new legislative program, manufacturers would provide a 50% discount to most beneficiaries for brand name medicines covered by a patient’s Part D plan when purchased in the coverage gap.
PhRMA President and Chief Executive Officer Billy Tauzin said that his organization will be working with AARP, President Obama, and congressional leaders toward achieving comprehensive health care reform this year. “Even though we have had policy disagreements in the past, this is an historic coming-together moment,” Tauzin said. “AARP, the largest advocacy organization on behalf of American seniors, clearly recognizes the importance of innovative, cutting-edge medicines to the lives of patients everywhere.”
Beneficiaries fall into the doughnut hole when annual prescription drug expenses exceed $2700. Once patients hit that threshold, they must pay the full cost of their prescription drugs until they become eligible for Medicare’s catastrophic coverage. Currently, that happens when a patient’s annual expenses exceed $6154; however, the AARP Public Policy Institute predicts that the size of the gap will almost double–from $3454 to more than $6000–by 2016, if nothing is done.
In the meantime, for patients who may have questions about the coverage gap, AARP recently launched a new online resource, a doughnut hole calculator (www.aarp.org/doughnuthole), to help guide patients through their prescription drug options and keep track of out-of-pocket costs.
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