Drug plan gap starts to hit seniors

Published 9:00 pm Sunday, July 30, 2006

WASHINGTON – 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 Virginian recently told Howard Houghton of the Fairfax Area Agency. “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.

As of mid-June, federal officials said, 22.5 million people were enrolled in the program, about half of those eligible. The federal Centers for Medicare and Medicaid Services 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.

Before the program’s start, the CBO 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.

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, Md., 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.

Columbia, Md., 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.

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.

“It was a huge success,” she said of the bypass operation. “But not having the drugs could kill me.”