The NewStandard ceased publishing on April 27, 2007.

Seniors Begin Falling into Plan D Coverage Gap

by Jessica Azulay

July 19, 2006 – A health-policy organization is warning that millions of seniors and people with disabilities will soon be hit with high out-of-pocket drug expenses under the new Medicare plan.

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In a report released yesterday, the Institute for America’s Future describes a coverage gap written into the Medicare Part D prescription drug program that will force patients with over $2,250 in drug costs to begin paying the full costs of their medications – even while continuing to pay premiums to their insurance companies.

In what has been dubbed the "doughnut hole" by Part D opponents, the program caps regular coverage for all but the poorest seniors and people with disabilities at the $2,250 mark. Once a patient reaches the cap, he or she must pay full price for drugs until they have reached total costs of $5,100. If the patient manages to pay the $2,850 in out-of-pocket expenses and still needs more medication, "catastrophic coverage" kicks in, and the insurance company once again picks up most of the tab.

Medicare enrollees with the lowest incomes who have applied for special subsidies will not face the coverage gap. But some recipients have already run into it.

In its report, Institute for America’s Future narrates the stories of some who have already "fallen into the doughnut hole."

According to the Institute’s calculations, the average senior enrolled in the program will hit the doughnut hole on September 22; "doughnut hole day" for the average mental-health patient enrollee will be August 6.

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The NewStandard ceased publishing on April 27, 2007.

This News Brief originally appeared in the July 19, 2006 edition of The NewStandard.
Jessica Azulay is a staff journalist.

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